(The following statement was released by the rating agency)
CHICAGO, April 26 (Fitch) Fitch Ratings has affirmed the 'A+'
Rating (IDR) of Chubb Limited and the 'AA' Insurer Financial
rating of its operating subsidiaries. The Rating Outlook is
Stable. A complete
list of rating actions follows at the end of this release.
KEY RATING DRIVERS
On Jan. 14, 2016 Chubb Limited was created when ACE Limited
acquired the Chubb
Corporation for approximately $30 billion, creating one of the
insurance companies in the world.
The transaction increased size and scale for the combined entity
approximately $36 billion in global gross written premiums with
one-third of business originating outside the United States.
demonstrated past success in executing successful acquisitions,
but the size and
complexity of the Chubb acquisition presented a unique
However, the company's very strong combined 2016 operating
results and increased
run rate integration savings estimate of $800 million by the end
of 2018 provide
indications that the integration is proceeding according to plan
if not slightly
The combined company's rating strengths include a very strong
position and financial flexibility with moderate leverage and
sources of revenues and earnings.
Chubb's operating performance continues to exceed peers and is
favorable underwriting performance across all business segments
catastrophe losses, consistent favorable loss reserve
investment income and strong operating cash flow.
For analytical purposes Fitch utilizes pro forma 2016 figures
that treat the
acquisition as if it took place on Jan. 1 instead of Jan. 14.
For full year 2016
net written premiums were $29 billion, down about 3% from the
prior year on a
constant dollar basis. The calendar year combined ratio for full
remains favorable at 88%, relatively flat compared to 87.5% for
reported an 87.5% combined ratio for Q1 2017 compared to 90% for
To fund the transaction legacy ACE raised $5.3 billion in debt
and about $15
billion in equity plus cash dividends. Stated financial leverage
was 22% as of
Dec. 31, 2016, which is consistent with rating tolerances and
will likely trend
down towards 20% in the near term.
Operating fixed charge coverage was 10 times (x) as of Dec. 31,
2016, which is
lower than historical averages due to the higher debt load but
still in line
with rating expectations. The new combined entity is anticipated
sufficient debt servicing capacity from operating subsidiary
earnings, and other liquidity sources.
Key current rating triggers that may lead to an upgrade include:
--Continued very strong operating performance with a combined
approximating 90% could lead to an upgrade given larger
operating scale and a
more diverse business profile;
--A material improvement in tangible capital;
--Operating fixed charge coverage approximating 15x;
Key rating triggers that may lead to a downgrade include:
--A material deterioration in operating performance such that
the combined ratio
is consistently less profitable at over 95%;
--A significant reduction in stockholders' equity that is not
recovered in the
near term or any damage to franchise value could lead to a
--Increase in financial leverage ratio to a sustained level of
Fitch has affirmed the following ratings:
--IDR at 'A+'.
Chubb INA Holdings Inc.
--IDR at 'A+';
--$300 million senior notes at 5.75% due 2018 at 'A';
--$500 million senior notes at 5.9% due 2019 at 'A';
--$1.3 billion senior notes at 2.3% due 2020 at 'A';
--$1 billion senior notes at 2.875% due 2022 at 'A';
--$475 million senior notes at 2.7% due 2023 at 'A';
--$700 million senior notes at 3.35% due 2024 at 'A';
--$800 million senior notes at due 3.15% 2025 at 'A';
--$1.5 billion senior notes at due 3.35% 2026 at 'A';
--$100 million senior debentures at 8.875% due 2029 at 'A';
--$300 million senior notes at 6.7% due 2036 at 'A';
--$475 million senior notes at 4.15% due 2043 at 'A';
--$1.5 billion senior notes at 4.35% due 2045 at 'A';
--$600 million senior notes at 5.75% due 2018 at 'A';
--$100 million senior notes at 6.6% due 2018 at 'A';
--$200 million senior notes at 6.8% due 2031 at 'A';
--$800 million senior notes at 6% due 2037 at 'A';
--$600 million senior notes at 6.5% due 2038 at 'A';
--$1 billion junior subordinated debentures at 6.375% due 2067
ACE Capital Trust II
--$300 million capital securities due 2030 at 'BBB+'.
ACE American Insurance Company
ACE Fire Underwriters Ins. Company
ACE INA Overseas Insurance Company Ltd.
ACE Insurance Company of the Midwest
ACE Property and Casualty Insurance Company
Agri General Insurance Company
Atlantic Employers Insurance Company
Bankers Standard Insurance Company
Chubb Atlantic Indemnity Ltd.
Chubb Bermuda Insurance Limited
Chubb Custom Insurance Co.
Chubb Indemnity Insurance Co.
Chubb Insurance Company of Europe, S.E.
Chubb Insurance Company of New Jersey
Chubb Lloyds Insurance Company of Texas
Chubb National Insurance Co.
Chubb Reinsurance (Switzerland) Limited
Chubb Tempest Reinsurance Limited
Executive Risk Indemnity, Inc.
Executive Risk Specialty Insurance Co.
Federal Insurance Company
Great Northern Insurance Co.
Illinois Union Insurance Company
Indemnity Insurance Company of North America
Insurance Company of North America
Pacific Employers Insurance Company
Pacific Indemnity Co.
Texas Pacific Indemnity Company
Vigilant Insurance Co.
Westchester Fire Insurance Company
Westchester Surplus Lines Insurance Company
--IFS at 'AA'.
The Rating Outlook is Stable.
Gerald Glombicki, CPA
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
James B. Auden, CFA
Keith M. Buckley, CFA
Media Relations: Hannah James, New York, Tel: + 1 646 582 4947,
Additional information is available on www.fitchratings.com
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