2Q 2026 Chubb Earnings Conference Call

thank you for standing by my name is jail and i'll be your conference operator today at this time i would like to welcome everyone to the chubb limited second quarter 2026 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 we would like to ask a question during this time simply press star followed by the number one on your telephone keypad if you would like to withdraw your question simply press star one again well now i'd like to turn the conference over to susan Spivak, Senior Vice President, Investor Relations. You may begin.

Thank you and welcome to our June 30, 2026 second quarter earnings conference call. Our report today will contain forward-looking statements including statements relating to the 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. See our recent SEC filings, earnings release and financial supplement, which are all 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 Chris Hogan, our Chief Investment Officer. Then we will take your questions. Also with us today to assist with your questions are several members of our management team, and it's now my pleasure to turn the call over to Evan.

Good morning. We had a very strong quarter. The results speak to our strengths and competitive profile the health of our balance sheet the growth of our invested asset and diversification of our businesses globally with the opportunities they present all set against our disciplined approach to underwriting strong pnc underwriting investment and life income results led to core operating earnings of $2.8 billion, or $7.26 per share, up 14.6% and 18.2% respectively over the prior year. Our most important measure of shareholder wealth creation tangible book value per share is up 17.1 percent year over year our annualized core operating return on tangible equity was 21.2 percent for the quarter and core operating roe was 14 and a half percent pnc underwriting income was more than 1.9 billion up almost 19 with a combined ratio of 83.8. On a current accident year basis, excluding cats, the combined ratio was 82.2%. On the investment side of our business, adjusted net investment income was a record $1.88 billion, up more than 11%, supported by excellent performance in our fixed income and alternative asset portfolios. The fixed income portfolio yield was 5.1, and our current new money rate averaged 5.5% as of June 30. Our invested asset now stands at $175 billion, up from $161 billion a year ago. life income of $332 million was up 9%. As you know, we are well diversified globally by geography and product and by the type of customer we serve in both commercial and consumer businesses. And we are well diversified by distribution channel, reaching customers the way they want to buy. Our pattern of growth speaks to this. The substantial majority of our businesses are growing, with the balance flat or purposely shrinking due to inadequate pricing or terms. The most obvious and visible example of this is U.S. large account and E&S property, where we again shed a significant volume of premium. Property aside, the vast majority of the balance of our businesses in the U.S. and globally are growing at various rates, some faster, some slower, market and macro conditions dependent, including personal lines, small and middle market commercial, A&H, life, and even large account business excluding property peters can have more to say about financial items looking more closely at growth pricing in the rate environment global pnc premiums were up three percent or 6.3 excluding large account ns property overseas general grew 10.2 percent or 4.8 in constant dollar north america was up about a half a percent with commercial down 2.3 while personal lines and ag were up each six percent commercial was up 4.1 major and specialty property again aside for context and observing from a broader perspective Soft market conditions have begun to spread beyond property to more casualty lines, particularly E&S, so those certain classes of large account and middle market are growing more competitive. Pricing in numerous areas of casualty are failing to keep pace with loss costs, which are hardly benign. Keep in mind, U.S. casualty loss costs are rising at a pretty steady 6% to 7% for primary casualty and 9.5% to 12% for excess. That's per year, and it varies by class of business as to whether it's rising 6% or 7% or 9.5% or 12%. Pricing becomes marginal or inadequate pretty quickly when you're running those kinds of loss costs. In the meantime, financial lines continues to be soft, and here we notice an unsurprising pattern where experienced large companies are much more disciplined and rational, While naive newer players, particularly financial lines, MGAs, and smaller companies, are underwriting in prices and terms that are inadequate. In fact, of late, we've observed brokers securing coverage terms from these markets that experienced underwriters discontinued 20, 25 years ago, and for good reason. Again, from Chubb's perspective, while all this impacts us, we are so well diversified that it has relatively and absolutely less impact overall. With that as a baseline, I'm going to give you more color on the quarter by division and region. Our international retail business, which produces more than $17 billion in gross premiums annually, operates in 51 countries and is about 90 percent of our overseas general division. And it grew almost 12 percent in the quarter, or about six in constant dollar. Consumer-related businesses, both A&H and personal lines, grew up more than 12 percent, with commercial lines up over 11. latin america grew 15.6 asia grew 12 europe grew nearly seven and a half in our london wholesale business the market is highly competitive and not only in property it's worth noting that london is actively writing u.s casualty for the last few quarters a movie we have seen before the volume is growing and it rates in terms that can only end one way there's a reason u.s casualty is going to london and it isn't due to a lack of capacity in the united states premiums in our london wholesale business which is about 10 percent of international pnc we're down about one percent and a quarter in north america commercial premiums on our middle market and small commercial division grew almost 9% with PNC lines up 12 and financial lines down about 3. This is a powerhouse franchise which produces more than $9.5 billion in gross premiums annually with a vast geographic footprint and broad product capability serving small and mid-sized companies of all kinds from a wide range of industries. Premiums and major accountants specialty, or E&S, declined 9% in the quarter because of property. In North America, pricing for commercial property and casualty, excluding fin lines and comp, was up 1.3%, with rates down 1.4 and exposure change of 2.7%. Property pricing was down about 6, with rates down 10.5 and exposure up 5.2. But going a step further, property pricing was down 12% in shared and layered, major and specialty for the business we wrote. Market pricing for the business we gave up or passed on, was down around 40%. In middle market and small commercial, property pricing was up 2.3%. Casualty pricing in North America was up 7.1%, with rates up 6.4% and exposure up 0.7%. And FinLine's pricing was up 0.3%. On the consumer side of North America, our high net worth personal lines business, the clear market leader in that category, had a really good quarter, with premium growth of 6% and renewal retention on an account basis of 90%. Our North America personal lines business is now more than $8 billion in gross premiums annually. In our international life insurance business, premiums and deposits rose almost 14.5%. The vast majority of our life exposure, as you know, is in Asia. And the majority of our growth is in North Asia, meaning China, Hong Kong, Korea, and Taiwan. premiums in our north america chubb worksite benefits business were up 14 our life division produced 332 million of pre-tax income in the quarter up nine percent from last year the life division now produces annual premiums of over 8 billion five years ago it was two and a half billion. Our diversification, presence, and capabilities globally, and our operating discipline provide us with continued growth opportunities and resilience. This quarter's results add to a long track record that demonstrates we are a consistent compounder of wealth. We're an all-weather firm. We have many sources of opportunity on both the liability and the assets side of the balance sheet and we are patient cats and fx aside i'm confident in our ability to continue to outperform and to generate strong growth and operating earnings in eps and most important double digit and tangible book value our most important indicator of shareholder wealth i'll now turn the call over to peter and then i'm going to come back and we're going to take your questions.

Thank you, Evan, and good morning. We had another strong quarter, led by our P&C divisions globally, growing life business, and strong investment performance, all of which further strengthened our financial position, including invested assets of $175 billion and $3.5 billion of adjusted operating cash flows. There are a few capital-related matters I'd like to touch on. First, we issued $2.2 billion of debt across a few currencies at a weighted average cost of 4.2% and an average term of about 7.5 years. The use of proceeds is for general corporate purposes, which includes the repayment and refinancing of debt. Secondly, in May, our board authorized a new $7.5 billion share repurchase program that took effect on July 1st with no expiration date. In the quarter, we returned $1.4 billion of capital to shareholders, including $979 million in share repurchases at an average price of $327.18 per share and $395 million in dividends. We ended the quarter with an all-time high in book value of $75 billion or $195.45 cents per share. Book and tangible book value per share excluding AOCI grew 2.8% and 3.8% respectively for the quarter and 11.4% and 15.8% from last year. Pre-tax catastrophe losses were $475 million for the quarter, principally from weather-related events in the U.S. Pre-tax prior period development in the quarter in our active companies was a favorable $441 million, split 89% short tail lines and 11% long tail lines. Our corporate runoff portfolio had adverse development of $158 million, with over two-thirds of that coming from molestation-related claims development. Our paid-to-incurred ratio for the quarter was 90%, and our net loss reserves increased to nearly $69 billion, representing a growth of 4% from the second quarter last year. excluding CAAT's PPD and agriculture, our pay to incur ratio was 86%. Our core operating effective tax rate is 19.2% for the quarter, which is below our previously guided range due to shifts in the mix of income and discrete tax benefits related to equity awards and certain investments. We continue to expect our core operating effective tax rate for the full year to be in the range of 19.5% to 20%. Turning to investments, our A-rated portfolio increased about $2.5 billion in the quarter to $173 billion and is up 14.3 or 9% over the last 12 months, supported by approximately $16 billion in adjusted operating cash flows. Adjusted net investment income of $1.88 billion was above our previously guided range, primarily due to strong growth in the invested asset base and higher than projected private equity income. To give you a bit more color on investment income and the portfolio, I'll turn it over to our Chief Investment Officer, Chris Hogan.

Thank you, Peter. Good morning, everyone. Our public fixed income portfolio generated $1.63 billion of income in the quarter, up 12% year over year. And our private investments, which make up 12% of the portfolio, contributed $250 million of income, up 9.5% year-over-year. Our fixed income portfolio will continue to generate consistent and growing quarter-to-quarter income. And as we thoughtfully grow our private investments, income from that book, while more variable, will continue to trend higher over time. This is an ideal environment for investment-grade bond investors. Our reinvestment rate of 5.5% is a structurally attractive level, sitting well above the portfolio's book yield of 5.1%. The portfolio and insurance operations continue to generate excellent cash flow that we're investing at yields that both compound book value and drive significant income growth. Financial assets in many markets are expensive and priced to perfection. At the same time, longer-term yields remain exposed to structural pressures, rising federal deficits, corporate credit demands, persistent inflation, and the potential for foreign rotation out of U.S. assets. These forces may lead to higher yields, wider credit spreads, and pressure on risk asset valuations. We remain disciplined and focused on risk-adjusted returns, maintaining a substantial ballast of high-quality, liquid investment-grade assets and a conservative duration. This positioning is central to our current strategy. It will allow us to move quickly to take advantage of market dislocations as opportunities develop. I'll now turn the call back over.

Thank you. At this point, we're happy to take your questions. Operator, please open up the line for questions.

Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue if you would like to withdraw your question simply press star one again if you're called upon ask a question and are listening via loudspeaker on your device please pick up your handset and ensure that your phone is not on mute when asking your question we do request for today's session that you please limit yourself to one question and one follow-up your first question comes from the line of matt heimerman of city your line is open hey good morning everybody um a couple questions first question is just international life and accident in health um there was some regulatory decrees changes in singapore on deductibles for

accident health and then investor related products in hong kong um for mainland china visitors i'm just curious if there was any impact in the court or any product redesign um required um sorry they were playing with the buttons here for a second man could you um can you just um repeat the the question itself. Sure. So in Singapore, there were some regulatory changes to deductible levels for accident health products. And in Hong Kong, obviously, there was a decree related to investment products for mainland China visitors.

I'm just curious whether or not those had any material impact on flows in the quarter, if there's any need to change product design at all to address those no i'll keep it simple no there was no um impact we don't write that kind of accident and health that you're imagining in singapore we write remember we write supplemental health we don't write traditional major medical um and typical hospitalization That's not our business. And that's what the Singapore decree that you referenced was about. So no impact to us there. It's not our game. And in Hong Kong, on the flows, I think there's an overreaction. First of all, we did not have an impact. And I don't expect an impact on Chubb going forward. I think there was an overreaction to the government and the regulator pronouncements and actions they took. They were really around what I'll say bad actors, those who were abusing the system and the rules that are in place that allow capital flows north to south and allow for investment products in Hong Kong.

Thanks for that, and then just one follow-up, taking a step back, you have got pretty sober views of marketing conditions, and I would say that's a pretty consistent perspective that I think you bring to looking at the market. I guess how, and I would say increasingly that feels a bit different in terms of potentially prospective views on profitability from some of your other competitors. I'm curious what they see that might be different than what you're seeing and just how you're thinking about the distribution of outcomes as it pertains to the market today.

Yeah, I can't, I'm not in the heads of others and I don't, you know, I don't know what they're specifically looking at. we all face the same market conditions and we all face the same reality and so i'm just gonna just best you know call it as you see it i mean this is what it is and um and the results you know people can use words but the results speak for themselves and um and um you know i'm very confident in spite of market condition which market is the market um in chubb's ability to continue to produce outstanding results and to outperform just given our you know which we've we've purposely built over so many years diversification um globally and within product and commercial and commercial pnc on that leg up so i'm going to call it as i see it and I can't speak to what others are thinking or have to say.

Appreciate it. Thank you, Evan.

Your next question comes from the line of Mayor Shields of KBW. Your line is open.

Great. Thanks so much, and good morning. In North America commercial, it looks like seeded premiums were up a little bit more than 20% year over year.

Just hoping you can give us a little colour on the nature of the increasing reinsurance spend and where we would see that in future results. yeah you know um first of all it's um it's a variation just um it varies by line of business and and so there's a there's some mix involved in there but in certain areas um we are purposely um reinsuring a bit more um you could imagine that in property you could imagine that in certain areas of thin lines as we've said before um and of course we are and um you know um if there's a

hungry market um at times um irrationally um makes sense to us to feed the hungry okay no fair enough uh second question maybe taking a step back you've talked a lot about the upside of diversification Would having a much bigger base of written reinsurance premiums be of strategic benefit?

You mean to grow our reinsurance business?

Yeah, either to grow it or to buy a reinsurance.

I'm sorry?

Or to buy a bigger reinsurance platform than you currently write.

No, it would make zero sense. Okay, perfect. You're welcome. I mean, I could have backed it further to your buyer, but I think you get it. No, that doesn't make any sense. Our playbook goes in the other direction.

Your next question comes from the line of Bob Huang of Morgan Stanley. Your line is open.

Hi, good morning. My first question is on the overseas general insurance. If we look at the accident year loss ratio over the past five quarters, it's been improving fairly steadily. I think part of the press release talks about business mix in that business is improving. Is it right to think that as you grow the Asia and last-hand business faster than the European business, should we see a natural improvement on accident year-loss ratio? Is that the right way to think about it?

I'm curious your thoughts on that. yeah um the the trend of improvement um that you note is a trend and it is a consequence of mix of business okay consumer and then within commercial um and consumer is accident and health And a variety of personal lines, from auto to specialty personal lines, depending on the country we're in. And then within commercial, a greater mix shift towards mid and small than large. I think the way, though, that you think about geography is not exactly right. I would think within more of product, as I said it, we're growing mid and small in parts of Europe in a meaningful way. We're growing it in Latin America, not to the same degree. You got to know the Latin American countries, the volatility and the cat exposure.

And we're growing in Asia, of course. um and so i i wouldn't think about i i agree and you you just get what i just said to you everything except okay asia latin america versus europe i i i would disabuse you of that part okay really helpful thank you for that uh thank you for kind of helping me think about that uh my second question is on uh north america personal line obviously your personal line is different from everybody else's and a lot of a lot of personal line carriers are seeing pricing pressure you're not really seeing that like how durable is your rate environment in your particular part of

the personal line business can you maybe help us think about just the industry dynamics for your specific target market yeah you know first of all i i think most of the discussion that you're you're engaged in around personal lines in the United States is general market auto. And that is, you know, we're not active within that. And then to a degree, but a much lesser degree, general market homeowners. We are in the high net worth business where it is far more about the richness of coverage and the services you're capable of providing and the broad range of product because um you know there's a spectrum of high net worth customer but the the complexity of their insurance needs is the hallmark regardless of where you are in that spectrum and your ability to underwrite it and then yes to price it and to manage it and then And the other part of it that is just people miss is they buy for the claim service and the richness of the claim service that you provide. It's not a matter of did you just pay them an amount of money because they had a loss. They want to be put back in the condition they were in before the loss. Imagine an antique home. Imagine a specially designed home in a cat-exposed area. Gets very expensive, very technical, hard to manage. Imagine the sensitivity around their liability claims. They're buying for a lot more than price. And your ability to get paid adequately, we've improved. And if you look at our loss ratio over years, it's not simply about rate increase. it's the complexity in our in our in our actual rating algorithms and our risk selection and applying rate against exposure um in a far more sophisticated manner and by the way that's one example of use of technology and that continues to evolve and will continue to evolve so i feel quite confident in the future. And by the way, I am the biggest fan of this wonderful framework.

I really appreciate that. Thank you very much.

Your next question comes to mind of Tracy Benjigi of Wolf Research. Your line is open.

Thank you. Good morning. It feels like there's a lower barrier of entry in a way for large accounts since London insurers are getting into U.S. casualty, MGAs are disrupting property. so maybe a higher barrier for small to middle market in a way where small commercially really need a strong field operation setup is it fair to say that's something you inherited from legacy chub and since you had such remarkable growth from small to middle market this quarter can you touch on the strength of your field operations or if i'm on to something regarding that competitive moat thank you um and tracy thanks for the question um inherited from legacy chubb when we put ace and chubb together which is about um 11 years ago now um it was putting

together in essence a brokerage large account specialty um um player and i'm restricting that to the united states because it was a global player um and and with large accident and health and growing personal lines with an agency based middle market small much less small but middle market um and specialty and high net worth player um us dominated and the ability to put those two together agency and brokerage very different cultures um together under one roof and and have one unified strategy and one benefit from the other which each brought skills to the table That was the thesis. And frankly, I think it's proven, you know, it's proven just to be a wonderful combination. And what a powerhouse franchise. And mid and small, and we've grown small, have benefited significantly from that, broadening the product capability of that agency business, broadening our appetite and our ambition to move into small commercial and lower middle market, mixing of skills of people between the two. That has just burnished that franchise, our branch operations and the reach that you reference. But along with technology, as it takes hold and emerges, it allows us to reach in a cost-effective way the broadest range of distribution, Not just the very large players in distribution who are our important partners, but partners and agents and to do it effectively. Our own in-households and service on their behalf. All that is coming to play. And then with the pioneers.

Excellent. Can you also unpack your comments a bit more on soft market conditions spreading to certain areas of casualty? Just my own observation, it feels like hard pricing really is a commercial auto story as excess casualty also includes auto. Do you share that view?

I'm not sure I understood the last part of what you just said. Oh, sorry. You said, I'm in on casualty, and then you said something about hard market and auto.

Yeah, okay, sorry. Let me just rephrase. So the areas that we're seeing the most hardening on casualty is either a commercial auto or excess casualty, and within excess casualty, that also includes commercial auto. So I'm curious if it's really a commercial auto story on the pricing side for casualty.

No. It's across casualty. My comment about casualty stands that numerous areas, not all, but most areas of casualty, rate is, at this moment, not keeping pace with loss costs. And I impact loss costs. And this notion that somehow loss costs are becoming more benign, I'm not sure where that notion comes from, but it seems to me to just be talk. There is zero evidence across the industry that lost costs have abated. They're continuing to inflate at a steady rate. And I think there's an issue in the minds of maybe in the investing community that somehow steady means improving. They're not accelerating. They're increasing at a steady rate. don't confuse the two and um and and then what the what the results look like by uh in casualty well varies by area and um whether there's room or there's not room um to be more competitive and that you know i won't go any further than that thank you you're welcome your next question comes from line of rob cox of goldman sachs your line is open rob perhaps your line is on mute

hey how's it going sorry about that yeah i just wanted to ask on um you know small and middle i'm just curious i noticed the growth acceleration in the quarter curious if you feel like technology is breaking down any of the historic incumbent advantage in that market um yeah in which market small middle and whether technology is but look i think that technology but data and scale and size and breadth of capability that brings you um and insight is a competitive

advantage and i think it's a competitive advantage that um these things play out over years, and I've said it before. I think that's a structural, secular advantage.

Got it. Thank you. And then I just wanted to ask on Europe. I think the growth was a little bit lighter there this quarter. Is there any economic disruption that you see kind of expanding out from the Middle East conflict that worked into those numbers?

And just curious if you could size how you're thinking about underwriting risks and potential opportunities from the middle east as well yeah i am no to answer your question directly um i don't notice um an economic impact from the middle east um that impact the quarter um the quarter was just variability and you know based on competitive market and london versus the continent less so, large versus mid and small. And just the mix of all of that and variability in quarter. And looking out, I remain and am quite bullish on our opportunities in Europe. We've got a large installed base. We have numerous areas of strategic focus that we are actively engaged in, and we're just beavering away growing the business. And we have an outstanding business on the continent and in the U.K., going far beyond a London wholesale.

Thank you, Evan.

You're welcome.

Your next question comes from the line of David Motemadden of Evercore. Your line is open.

Hey, thanks. Just a question on the lost cost trends in North America commercial. So I heard you on the long tail lines. It doesn't sound like you've changed anything there, still being conservative. I'm wondering what you're seeing on the shorter tail lines. The favorable development's been pretty strong there. And, you know, are you thinking about making any changes there potentially?

I'm just sort of looking at some of your peers potentially making changes there. yeah you know shorter tail it's steady um we're we're we're not seeing a change it's it's bouncing around the four and a half percent um um and that is that is pretty steady um the only thing i'll tell you about the the long tail i cited those aren't conservative numbers those are actual trends as we observe them longer term and shorter term and we got a lot of data And, by the way, we triangulate it with those who observe industry. They're not specific to job.

Got it. That's helpful. And then maybe just on, you know, just sort of looking at the stellar accident-to-year-loss ratio, XCAT, within North America commercial. um i mean you you guys had called out i think in the 10q last quarter just the the adverse mix impact um just from from less property as as driving that deterioration um i guess i'm i'm wondering it's that you know as we see the mix shift more towards middle market um should that have a bigger offset uh as we go forward um you know just just sort of thinking about the margins here, which remains stellar. But obviously, the pricing is under pressure.

Yeah. Let me answer it like this, too. Combined ratio. For Chubb, and let's look at Chubb, our combined ratio, it's a hallmark. It's an expression of who we are. We're an underwriting company. Volatility aside, cats and large events, our combined ratios are sustainable. You know, obviously within a reasonable range of variability, but they're sustainable. That's the beauty of the size and scale of the company. Our diverse portfolio of quality businesses, our underwriting focus. And that's within North America and then more broadly across CHOP. That's the whole point. The bigger the portfolio, the greater the diversification of it, the less variability and the greater the stability of it overall. As you start breaking down into this little piece or that little piece, then variability becomes greater. And then add to that, our employment of tech and AI and the insights and efficiencies we are and will gain, and those also support combined ratio. So I feel confident.

Great. Thank you.

Your next question comes from the line of Gregory Peters of Raymond James.

Your line is open.

Good morning. So a couple things. Well, in your press release and in your comments, Evan, you talk about how you're confident in the ability to outperform and generate strong growth in operating earnings in EPS and double-digit growth in tangible book value. You know, with the pricing competition that you're talking about and its effect on your top line. Maybe you could sort of bridge the gap on how you think the organization's position to continue to generate strong EPS growth.

And, you know, I'm, I'm, I am aware and mindful the chatter since last night around the one word change we made. It's, it's, it's really is kremlin watcher and so let me let me let me take all that and wrap it into um and create the right context here look for many quarters um including the first half of this year i'd start with that um we've produced double-digit eps growth this quarter alone over 18 percent. Simply outstanding. My outlook statement is not guidance. And it's looking out beyond the next few quarters to simply give a directional sense over a longer period. And so, when you take that, given market conditions, We've simply broadened the range of outcomes modestly, and they include double-digit, by the way, within that of EPS, softening commercial P&C market conditions balanced against our global mix of businesses, including our mix of business within North America. Think mid and small commercial and personal lines, our vast international and consumer, our life, our invested assets, our capital management. We have many sources and handles to pull. I am quite confident. In fact, I am confident in our ability to produce very strong and potentially double-digit EPS growth and will produce strong earnings growth as we go forward.

I've asked this question of one or two others, and I think it's appropriate for you for your company as well. You know, there's been a bunch of stories that have hit the press over the last couple of months about the rising costs of technology, you know, thinking about token costs and things like that. And, you know, with quite an impact on the market, you spoke last year about using technology to generate you know um material savings um for your organization over the middle middle term so i'm just curious how you how you can reconcile for us the rising costs of technology deployment versus the ability to harvest those savings and generate improving margins yeah first of all the chatter that you've been reading about what you've been reading you i i think the investing community broadly um ought to put it in context it's it's more

that token usage is really about the vast token usage among tech companies um and and those that AI and tech companies. They use vast amounts in model development. That comment is not really applying to general businesses. We know our token usage. We know our token costs. Frankly, it's within our economic model and how we measure expenses. Our token costs and the usage that way is a fraction, a minor fraction, relative to the efficiencies, the insight, and we measure it in hard dollars. This is not liberal arts around here.

Fair enough. Thanks for the answers.

Your next question comes from the mind of Andrew Kligerman of TD Cowan. Your line is open.

Hey, good morning. So looking at the net written premium, you mentioned that there's continued softness in financial lines and flat to down pricing we're seeing in workers' comp. Yet financial lines net written was up 2.6% and work comp up 6.2% net written. So I'm kind of curious is, you know, where you might be seeing the opportunities in those lines and that you're confident in the performance going forward there?

First of all, in comp, you know, remember, we play it up and down the stack from large company where we are a market leader, mid and small where we are you know we are market leaders and um so it'll vary by state by industry um by type of business and um and so it's selection within there and exposure changes um think payrolls think number of employees um those bounce around and that improve that adds or subtracts from your premium revenue growth each quarter. In financial lines, financial lines are a broad set of businesses. You know, there again, we play in very large count, and we play in small and mid. And it's not just public D&O. It's private D&O. It's not-for-profit D&O. It's E&O, and a lot of broad classes of E&O. Fidelity, which is a form of surety, but different than that. Fidelity is part of financial lines. And we put cyber as part of our wrap up in financial lines. So it's across a broad range while we've been, you know, and I've been vocal that not-for-profit, private D&O is very soft and overly soft where the underwriting doesn't make sense and pricing. There are other areas where it remains adequate, and it's up and down the street. It varies. Got it.

Yeah, very much so. The diversification is really helping here. And, you know, just looking at your Chubb benefits business, which is a relatively small portion of life, but it was up 14%. So, do you, Evan, do you kind of see this business just continuing to grow organically, or is it something that you think might need some inorganic investment to kind of accelerate it?

Look, we've been added in a steady way for over five years now. And thank you for that question. It divides into two pieces. chubb benefits the part that works very closely um in the through the brokerage distribution um with our predominantly with our mid and small um pnc commercial colleagues we're selling all lines and that is is very successful um way of distributing and then secondly the old combined agency force we retooled it and it is selling it is predominantly focused on small and lower middle market companies to sell worksite benefits and install them. We've invested a lot in distribution and product, but particularly in technology and our ability to deliver product and service it right at the desktop of individual employees and to do it in a frictionless way we're focused on growing organically we we just see a tremendous opportunity to continue growing that business at double digits and that's our focus thanks and you know what over time as I look at it over the next number of years it will emerge as a as a more

significant contributor to chubbs results top and bottom line thank you your next question comes line of alex scott of barclays your line is open okay thanks for putting me in uh last one on the paid you incurred um yeah i think before the pandemic averaged something in the high 90s you know just looking at it's still running at 90. I know some of that's from you know a bit more growth than just the natural lag but you know could you talk about why that would be running I'm just talking about overall paid to incurred and just your views on why that's still kind of continuing to run well below historical levels why it's continuing to run as it is yeah just The fact that it's running at 90 versus, I think, pre-COVID was, I think, averaged around 97. So, I'm just trying to understand.

I think that's excellent. It speaks to…

Next one, capital. You didn't talk as much about the excess capital this quarter, but, I mean, you guys have had stellar earnings. Obviously, it's building. How should we think about the current levels there and the different options you're looking at for deployment and what that could mean for the CPS growth that we're all focused I'll take that one.

Look, nothing's changed in our framework. We're deploying capital accretively and underwriting and investments. We'll continue to return capital through dividends, repurchases. I mean, you've seen us do that over time, balanced by opportunity, so nothing's really changed.

And that's all the time we have for our Q&A session. I'll turn the conference back over to Susan Spivak for closing remarks.

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

Thank you. That concludes today's conference call. You may now disconnect.