Thank you for joining us. My name is Greg, and I will be your conference operator today. I would like to welcome everyone to Chubb Limited's Second Quarter 2025 Earnings Call. I will now hand it over to Karen Beyer, Senior Vice President of Investor Relations. Karen, please proceed.

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 risks 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.chubb.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 Enns, 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 and regions of the world contributed to the quarter's growth, particularly in North America, our middle market and small commercial, Personal Lines, and E&S 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 the 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 1 percentage point better than a year earlier. Current accident year underwriting income, excluding cats, was up almost 11.5%, supported by a combined ratio of 82.3%, again, nearly a full point improvement from the 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, at $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. Tangible 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%, a very strong result. Peter will have more to say about financial items. Turning to growth, pricing and the rate environment. Global P&C 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 P&C underwriting environment, large account-related short-tail business, both admitted and E&S has grown quite competitive. A lot more capital is chasing the property business, and prices are softening, while terms and conditions remain steady. We are, 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 the backdrop, and I'll give you some more color by division. Beginning with North America, P&C premiums, excluding agriculture, were up 5.3%, including growth of 9.1% in personal insurance and 4.1% in commercial. P&C lines up 4.2% and financial lines actually up 3.6%. In Commercial, we had a good quarter for new business, up 7% versus last year, driven by middle market across the board and in large account and E&S 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 within 12% in large account business, both admitted in the E&S, 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 remained steady across the board. No change from what I gave you last quarter. On the consumer side of North America, our high-net-worth 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 remained 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, P&C pricing was up just 0.5% and Financial lines pricing was down over 6.5%. The loss 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 pretax 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 and bottom line at a superior rate, tax 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.

Good morning. As you've heard from Evan, we had another strong quarter that contributed to quarterly and 6-month records. Our results were supported by exceptional balance sheet strength, including all-time highs in book value of $69 billion and cash and invested assets of $160 billion. Additionally, the quarter produced adjusted operating cash flow of $3.2 billion. There are a few capital-related matters I'd like to touch on. In May, our Board authorized a new $5 billion share repurchase program that took effect on July 1 with no expiration date. In the quarter, we returned $1.1 billion of capital to shareholders, including $388 million in dividends and $676 million in share repurchases. Book and tangible book value per share grew 6.1% and 8%, respectively for the quarter. Book and tangible book value per share, excluding AOCI, grew 3.4% and 4.5%, respectively, for the quarter and 10.3% and 15.3%, respectively from the prior year. This quarter, we also closed on the acquisition of Liberty Mutual's P&C business in Thailand, which diluted tangible book value by about $230 million or about 0.5 percentage point of growth. Our core operating return on tangible equity and core operating ROE were 21% and 13.9%, respectively, for the quarter. Pretax catastrophe losses were $630 million for the quarter, split 60% U.S. and 40% international from a variety of events. Pretax prior period development in the quarter in our active company was favorable $319 million, split 87% short-tail, primarily commercial property-related lines and personal auto and 13% long-tail. Our corporate runoff portfolio had adverse development of $70 million, mostly from developments related to claims. Turning to investments. Our A-rated portfolio increased over $6 billion this quarter, reflecting strong operating cash flow as well as positive mark-to-market and favorable FX, partially offset by shareholder distributions. Adjusted net investment income was $1.69 billion, and we now expect adjusted net investment income to be approximately $1.72 billion to $1.74 billion next quarter. Our core effective tax rate was within our previously guided range at 19.1% for the quarter, and we continue to expect our annual core operating effective tax rate to be in the range of 19% to 19.5%. I'll now turn the call back over to Karen.

And at this point, we're happy to take your questions.

So during the quarter, Evan, you and John wrote an editorial in the Wall Street Journal about the litigation challenges that the industry faces. And so I wanted to just have you talk a little bit more about this. Specifically, how is it affecting the coverages for casualty and general liability? Is it making it uninsurable? And I guess, how do you see the tort reform situation playing out because getting some sort of federal resolution seems to be challenging to say the least, and a state-by-state strategy for reform seems like it could take forever.

Yes. So you have to separate two things. So let's not conflate. The two of us wrote that article. That was about public policy. And that was to flag an issue that people should be focused on for our country that is a problem. It impacts the cost of everything. It's inflationary. It impacts innovation and growth of businesses and continuity of businesses because of litigation and the movement of cost. Inflation around it, which runs at 7% to 9% every year, which is a multiple of what the nation runs as inflation, is roughly the total cost is about 2.5% of GDP, and only a fraction of the $550 billion goes to the actual agreed party. While litigation is an important function in a society based on law, the trial bar and the litigation funding industry together are money-making ventures that are out of control. And we are pointing that out because I started by saying, don't conflate two things because the insurance industry and our job, we don't print money. We intermediate money.

My first question is about Latin America. You had pretty strong Latin America growth in 2024. And this quarter, on a constant currency basis, it was even stronger. Can you maybe help us to get a better understanding of maybe if there's a specific country that's driving this or a specific product? Or can you maybe just help us about the opportunity there going forward and things of that nature?

Yes. Bob, we're throughout Latin America with a significant presence in Mexico. We are the number three P&C rider and number three auto insurer in Mexico. We've got 60 offices and thousands of agents to do over $1 billion of premium. Automobile in Mexico is an important business to us, as we've said for years, and it's growing well. Our digital business in Latin America, which shows up in Chile and Brazil, has important partnerships with the likes of new bank in Brazil, and we're the exclusive partner, joint venture partner with Banco de Chile in Chile. Those businesses and our consumer business there, both life and non-life, are growing quickly and doing quite well. Argentina, as the country has improved, we've had a presence forever, and Argentina in the commercial P&C business is growing. Our consumer business outpaced our commercial business in the quarter, and it's enduring. And it's not simply a trade; it’s across franchises that are moving from strength to strength with a lot of opportunity. It has a certain volatility signature to it. It's not smooth every quarter and quarter-to-quarter, but you measure it over any extended period. And we expect, depending on how the world goes, double-digit growth in Latin America to continue over time.

Okay. Yes, double-digit growth going forward is quite strong. Maybe we can ask about a hypothetical situation. The administration has mentioned potentially phasing out FEMA. If that were to occur, would it impact your high-net-worth business in the coastal states? Would you consider partnering with other insurers to provide flood insurance to support your high-net-worth segment? I'm just curious if you have any thoughts on this.

No. FEMA's flood insurance offers a relatively modest coverage limit. While this limit is important for the average consumer, it falls short for high net worth individuals, whose home values can reach millions, since FEMA provides about $250,000 in coverage. This doesn't significantly impact us. The private flood market, in which Chubb participates, is expanding on a selective basis, with improved mapping and underwriting compared to FEMA. If FEMA were to be phased out, I would view that as detrimental to the country. I would advocate for restructuring FEMA's coverage approach. I would not offer the same coverage to individuals who repeatedly rebuild in the same flood zone after multiple claims. However, I would retain it as a first loss option for those who have no alternatives from a social standpoint.

Evan, it was good to see that global P&C growth, excluding foreign exchange, is relatively stable this quarter at around 6% to 7%, consistent with the last few quarters even though you have stepped back from some large account property business. This suggests that growth in the other 80% of the portfolio, where conditions are favorable, may have accelerated a bit. Could you discuss the sustainability of growth in that 80% that has more attractive conditions? Additionally, could you share your outlook for the remaining 20%?

The pattern of growth ex that 20%. First of all, overall, the math is pretty simple. It's double-digit growth. When you add it all together, commercial and consumer P&C, the pattern of growth is durable. The pace of growth, as we can see looking forward, is durable for us. The themes are durable. It's around middle market and small commercial. In the United States, we're the second-largest middle market writer. Between that and small commercial, the opportunity, and I've talked about it before, it's not just cyclical. It’s secular to me, it's enduring. Our high-net-worth business, which has been growing rapidly, along with our margins from repricing and remodeling, has put us in a solid position. I expect that pattern to continue both in growth and the kinds of margin that it has generated. When I look at Asia and at the consumer businesses and the digital distribution-related growth for consumer business on one hand, and our growing agency auto business in selected countries on the other, and on our direct marketing A&H and our travel insurance business as more people travel in the region, that pattern of growth and opportunity continues. When I look at our middle market and small commercial because we are so deep in those markets, from Australia to Malaysia, Thailand, Singapore, and Taiwan, I expect to continue expanding. Our powerhouse business in Korea, which is fundamentally a direct marketing A&H business with life insurance, I expect that growth to not only continue but to accelerate. So throughout Asia, the themes of opportunity, commercial and consumer are enduring and are in front of us. Like Latin America, the region is vast and much larger than Latin America. It has a certain volatility signature to it. So it isn’t every quarter exactly the same or every year exactly the same. But as I look at it, it’s where we're leaning in, and we see more opportunity. Our business in Europe, the same. It's not just a large commercial business and specialty; it is a middle market business, expanding and growing more quickly in a variety of markets throughout. So overall, I look at this pattern of growth, earnings, and the stability of margin, and it all relates to the diversification of the company. Our E&S business in the U.S. printed about a 5.6% growth. Property was negative, but if you look under the hood, many lines of business, from construction to casualty, both primary and excess, our pet insurance business are growing nicely.

And then just a quick follow-up. Just in North America personal lines, great to see another quarter of current accident year ex-cat loss ratio improvement. Is that purely rate-driven improvement over trend, or was there anything else in the result that drove that improvement this quarter?

No, it's a combination. Rate improvement over trend occurs over a period of time. I mean that's been iterative over years that has occurred. And I've said it would drop over time into the 70s, and that's what it's done. That's what it needs to do, given its cat exposure. But it’s both that and underwriting shaping of the portfolio. We just grow more insightful. We have more tools available. We have a greater knowledge and ability, and that stands out in the high-net-worth business; it's very complex underwriting. The property exposures are also very complicated, and our insight into underwriting and managing that is what makes us unique, and we focus on that. Rate will never be enough to get you there. Underwriting doesn't equal rate. It equals risk selection and insight into risk engineering and managing the properties.

Evan, I'm just curious, looking at the North American commercial business, right now we're seeing written pricing below the loss trend. Are we at a period now for that business where we're seeing kind of peak margins, and we should maybe expect margins to deteriorate going forward, granted from a very attractive level?

I think that's simplistic. Yes, the headline number does show that, but that's why you need to peel it back. Casualty is ahead of the loss cost trend. On the other hand, the pricing for property right now is negative, and there is a more modest loss cost trend, but that loss cost trend is there. So while one is going one way, the other is going the opposite. At the same time, we did grow our financial lines this quarter for the first time in most of our portfolios, not all, but most. In certain areas, we're beginning to get rate, and I look at comp, and comp pricing was better than the prior quarter. There are many factors at play. When I examine our loss ratio overall across the globe, North America’s loss ratio, commercial was flat. That reflects a mix of business change occurring as well, more mid and small versus large, and then within E&S, a shift. Therefore, I don’t envision, as I look at what I see right now, the deterioration as your mental model suggests it might happen. We’re very careful about our loss cost trend factors we utilize in reserving for medical, where we use factors that are ahead of what we observe because it has a long tail. The situation we see in health insurance companies, and what drives the trend there in medical inflation isn’t the same factors that affect comp. We are not seeing it.

Evan, I was hoping you could talk about how sensitive your large domestic accounts are to social inflation in terms of the coverage that they're looking for. Is there a demand for more coverage, deeper, broader coverage? Is that changing in response to elevated social inflation?

Well, clients always want to buy deeper and broader coverage and maintain a positive arbitrage with insurance companies. The trend has gone the other way. Over the last several years, the terms and conditions around casualty have tightened. This varies by area, primarily with logistics, automobiles, trucking related, retail, slip and fall, etc., experiencing real social inflation, which is also true in the middle market, particularly around class actions related to chemicals. We are seeing terms and conditions tighten around retentions, which I discussed for a multi-year period. We were reshaping the book and took a hit to revenue at that time. But we adjusted client retentions, which leaves more with them while prices increased for the layers above the dollar swap due to frequency and severity of loss increasing. There is an equilibrium that is being achieved now where the terms and conditions and pricing reflect and are keeping pace with what is a hostile liability environment. So there has been a shift of risk back to clients because why would they want to dollar swap? It is an environment where it has been extreme inflation in liability insurance premiums to reflect the risk we are taking. To an extent, you could say that the middle market is not entirely immune from it. Look at middle market commercial auto, a compelling example of recent years—very difficult line for middle market carriers. That's the poster child for social inflation. It's a combination of both. We are driving in and gaining market share, with a third dimension being new insurance buyers as those economies grow. So we see not just new businesses, but also new industries developing with the economy. For example, middle market insurance may have covered Main Street, retail shops and restaurant owners, but new technology and services-related businesses are emerging. Thus, it’s not only new buyers, but also the addition of new products like professional liability and cyber insurance targeting environmentally friendly initiatives and changes as those economies shift towards renewable energies like wind and solar. It’s a healthy dimension, but varies by market, with no single theme across all.

Going back to the social inflation conversation. On the North American commercial loss trend, which I believe you said is around $6.5 million. Is there a way to break out or estimate how much of that is attributed to litigation finance or social inflation more broadly? Is there a way to think about that?

It's not an easy number to break out. But we do our own private work around that, and our ability to measure where there is litigation, financing, or not, is growing, but it's still not clear and not transparent enough yet.

Okay. That's fair.

What we can measure is that it varies significantly by state. That reflects the liability laws in those states. For example, we can measure how much comparative negligence affects each jurisdiction depending on the law around it. I might be the only party in a suit that has money, yet I'm only 15% liable, yet I’m required to pay 100% of the loss in that state if no one else counts. We can measure these economic circumstances and understand how changes in law in one place have this kind of impact. That's driving a lot of tort reform efforts in states like Louisiana or Florida.

Maybe pivoting to the larger account property marketplace. Given the extensive pricing declines from a modeling perspective, would it be fair to say that if we have a normal catastrophe or loss year in the remainder of the year, that this is kind of the worst behind us? Or is it just too tough to size up given the competitive dynamics?

I'm sorry, Mike. For a moment, I blanked out on you because a colleague was telling me to mention noneconomic damages in the liability sector, but regarding your question, here is how I see it. Large accounts buy substantial limits for property, dividing into layers, leading to a trading business. If you're not issuing the paper, managing claims, and underwriting policies around the globe like Chubb does, you might be at a disadvantage. Thus, insurance gets commoditized when there's excess capital eager for market share, creating a frenzy that results in reduced prices. This situation will evolve in response to major catastrophes and frequency of losses over time. The impact of major events over the next year will significantly impact pricing trends. Therefore, it's not a straightforward answer; the economics ultimately remain the same, just a matter of timing.

I have a question on the investment income, which has been flat over the past three quarters despite reasonable growth in the investment portfolio. I see the duration has been fairly stable. ForEx effects should have helped the last quarter. So does it all boil down to the pressure on yields outside the U.S.? And I do hear your comment about the positive trajectory of investment income over the next quarter. I wonder what really changes that.

Vikram, it's Peter. I think in the prior quarters, we disclosed that in certain quarters, we had lower-than-expected private equity-related income, which can be volatile. At the same time, what we’re signaling with the forward guidance is that, as cash flows have come into the portfolio, particularly over the last quarter, we expect investment income to continue to grow quite nicely.

Okay. So if I understand correctly, it's really the alternative income coming in that will help in Q3.

It's a combination of the alternative income coming out, where a component can be quite volatile, and a stable component. The cash flow entering the portfolio has been significant over the past quarter, and next quarter we will see the full benefit of that.

Growing invested assets remain at the forefront of our discussions.

Our buybacks remain quite variable—nothing has really changed. We don't provide guidance; we're keeping capital for risk and opportunity. We see significant opportunity and will flex our buyback strategy based on what we see happening in the market, with particular focus on our stock valuation and conditions in the insurance market. You’ll note that we just reauthorized a $5 billion open-ended share repurchase.

For the first question, I just wanted to ask about reinsurance and see if you could provide more color around just the step down in premiums and how you're finding the market in terms of relative attractiveness and price adequacy.

Yes. The reinsurance business—we wrote a large structured transaction last year that didn’t see. Excluding that, growth was rather muted, more property-related. It’s not a big deal; we simply didn’t like the trades. We remain disciplined and did not chase it.

Second question I had is on capital and just how you view excess capital? If you could update us on that and just the pecking order of things you're interested in and whether there’s heightened interest around M&A at all?

We're deploying our capital in ways that are accretive to our ROE, whether it supports insurance businesses or our investment strategies. We feel quite good about our capital management. It simultaneously provides flexibility and opportunity, which drives growth in our business—both organically and through potential mergers and acquisitions. Finally, we return capital to shareholders, as Peter mentioned, in a steady way through both dividends and share repurchases, which together exceeded $1 billion this quarter.

Thank you, everyone, for joining us today. If you have any follow-up questions, we'll be around to take your call. Enjoy the day. Thank you.

Thanks, Karen. Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.