6389bb52e0009f3f4ef67cebf64df4782a4aa2be9f13f5d6336b3933ee883f11

The negative income tax expense in Q4 2023 is due to a **one-time deferred tax benefit of $1.14 billion** recognized under Bermuda's newly enacted income tax law, which resulted in a **negative income tax expense (benefit) of $678 million** during the quarter.  **[0001193125-24-019737_d81578dex992.htm:4]** **[0001193125-24-019737_d81578dex992.htm:21]** **[0001193125-24-019737_d81578dex992.htm:6]** 

Why did Income tax expense turn negative in Q4 2023?

The jump in Q4 2023 EPS was driven by **significantly higher net income**—rising from **$1.311 billion in Q4 2022 to $3.3 billion in Q4 2023**—which was fueled by **record P&C underwriting income of $1.5 billion**, **record investment income** (with adjusted net investment income growing by **33% to $1.49 billion**), and a **one-time deferred tax benefit of $1.14 billion** that added **$2.76 per share** to EPS. Additionally, there was an improvement in underwriting performance with the combined ratio improving from **88.0% in Q4 2022 to 85.5% in Q4 2023**, along with the impact of share repurchases reducing the weighted-average shares outstanding.  **[CB_3371478_1]** **[0001193125-24-019737_d81578dex992.htm:3]** **[CB_3371478_4]** **[CB_3371478_1]** **[0001193125-24-019737_d81578dex991.htm:3]** 

What drove the EPS jump in Q4 2023?

The surge in **net income** in Q4 2023 was driven by several key factors. First, a **one-time deferred tax benefit** of **$1.14 billion** provided a significant boost.  **[0001193125-24-019737_d81578dex991.htm:2]** **[0001193125-24-019737_d81578dex992.htm:4]** **[CB_3371478_4]**  Additionally, there was **strong core operating income growth**—with record levels in underwriting, investment, and life operating income—which further contributed to the increase.  **[0001193125-24-019737_d81578dex991.htm:2]** **[0001193125-24-019737_d81578dex991.htm:3]**  Improvements in **underwriting performance** and a 35.2% increase in P&C underwriting income, driven by better results and lower catastrophe losses, also played an important role.  **[0001193125-24-019737_d81578dex991.htm:5]**  Moreover, **record investment income** accompanied by higher adjusted net investment income added to the overall improvement  **[0001193125-24-019737_d81578dex992.htm:6]** **[0001193125-24-019737_d81578dex991.htm:5]** , and the benefit from **favorable prior period development** provided additional support.  **[0001193125-24-019737_d81578dex991.htm:5]** 

What contributed to the surge in net income in Q4 2023?

The turnaround in net realized gains in Q3 2024 was driven by several key factors. **Fixed maturities** saw a marked improvement with net gains turning significantly positive, and **equity securities** experienced notable gains compared to previous losses. Additionally, **investment and embedded derivative instruments** contributed higher gains, and the impact from **foreign exchange** was somewhat less severe than in Q3 2023. These factors combined to reverse the prior losses and generate a strong net gain in Q3 2024.  **[0000896159-24-000013_cb-20240930.htm:75]** **[0000896159-24-000013_cb-20240930.htm:11]** 

What led to the turnaround in net realized gains in Q3 2024?

574f1b3e41fec76273aec06589e2e70a056629d7386e04540db426792c53ec69

The spike in **Operating Cash Flow** in Q3 2023 was driven primarily by several factors. **Net income** increased significantly—from **$3,935 million** in Q3 2022 to **$5,725 million** in Q3 2023—which set a strong foundation. Additionally, there was a substantial impact from the **insurance and reinsurance balances payable** that contributed an extra **$23,544 million**. Increases in **unearned premiums** (up by **$2,085 million**) and **future policy benefits** (up by **$570 million**) further amplified the cash flow. Although these were partially offset by reductions in **unpaid losses and loss expenses**, the overall effect was a notable improvement in operating cash flows.  **[0000896159-23-000016_cb-20230930.htm:5]** 

What drove the spike in Operating Cash Flow in Q3 2023?

The high investing cash outflows in Q3 2024 were driven by several factors, including **higher purchases of fixed maturities available-for-sale** (an increase of **$4,579 million**) and **higher purchases of equity securities** (an increase of **$1,640 million**). Additionally, there were **lower sales of fixed maturities available-for-sale** (a decrease of **$2,464 million**), **lower maturities and redemptions** (a decrease of **$2,628 million**), and a significant cash outflow for the **acquisition of subsidiaries** (an outflow of **$(538) million** compared to a prior inflow). These elements collectively resulted in much higher net cash used in investing activities during the period.  **[0000896159-24-000013_cb-20240930.htm:5]** 

Why were investing cash outflows so high in Q3 2024?

In FY **2023**, **higher net investment income** and **net premiums collected** were the primary drivers boosting operating cash flow. Additionally, the company recorded **net proceeds of $450 million** from the sale of consolidated investment products from Huatai's asset management companies, which further supported the increase despite being partially offset by **higher net losses paid** and **income taxes paid**.  **[0000896159-24-000003_cb-20231231.htm:174]** **[0000896159-24-000003_cb-20231231.htm:131]** 

What factors boosted Operating Cash Flow in FY 2023?

3b20cac81807a37de7bf88e51e378779c2522cb8400095e54832037fddd7d2d3

Net premiums written (USD, millions)

Net premiums earned (USD, millions)

Net investment income (USD, millions)

Losses and loss expenses (USD, millions)

Policy benefits (USD, millions)

Policy acquisition costs (USD, millions)

Administrative expenses (USD, millions)

Other (income) expense (USD, millions)

Amortization of purchased intangibles (USD, millions)

Net income attributable to Chubb (USD, millions)

9e855ef3a8d69fc7265a392ae18aac62b1f6ac02d050545878cabd4379800380

Net cash flows from operating activities [USD, millions]

a530ccfb26bc809bb8135565c7f5cc1318ddad9ffcedc4e2a0c9b1243c2ec0aa

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

72954601dea060a5fdfaef466291f30f127dff2626763e2a782f231706010f8c

653d937102957e63801803472abf88fe0eb6aa200ab6bf9cc38ca1d908a5871e

Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from Debt

Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

e6633d687cdb607362a9a4734f8046ed31e17094e44f869848b98ca606fd7539

1954b7b8f53d4c408870f6e11fca718727822c765e80f738b4e2af7b419501dd

6f8a3f24ee9cd3fc88fd494c0ab728c272c1784ffecfadc5f0748325fb044c60

Europe, Middle East, and Africa

Asia

Latin America

Other

North America

- Japan

Total Revenue

88ec4a66ba49735625269720a743645aa630f49f39873d4b3a8984e585ea0d2c

Chubb (CB)

Financials