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Acquisitions | 9 Months Ended
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Sep. 30, 2024
Business Combinations [Abstract] |
Acquisitions | Acquisitions Healthy Paws On May 31, 2024, we acquired the business of Healthy Paws Pet Insurance LLC, a managing general agent specializing in pet insurance, from Aon plc for approximately $300 million in cash. We recognized goodwill of $256 million and intangible assets of $44 million from this acquisition. Chubb has been the exclusive underwriter of Healthy Paws since 2013. The transaction positions Chubb to expand in a niche market with substantial growth potential. This business is assigned to the North America Commercial Insurance segment. Huatai Group Huatai Insurance Group Co., Ltd. (Huatai Group) is a Chinese financial services holding company and the parent company of, among others, Huatai Property & Casualty Insurance Co., Ltd. (Huatai P&C), Huatai Life Insurance Co., Ltd. (Huatai Life), Huatai Asset Management Co., Ltd., and Huatai Baoxing Fund Management Co., Ltd., of which Huatai Group owns 100 percent, 80 percent, 91 percent, and 85 percent, respectively (collectively, Huatai). On July 1, 2023, Chubb increased ownership interest from approximately 64.2 percent to approximately 69.6 percent. At that time, Chubb discontinued the equity method of accounting and applied consolidation accounting. Refer to Note 2 to the Consolidated Financial Statements in our 2023 Form 10-K for additional information. In the first quarter of 2024, we closed on incremental ownership interests of approximately 9.0 percent for $555 million, $319 million of which was paid prior to 2024, and $236 million of which was paid in 2024. Our aggregate ownership interest in Huatai Group was approximately 85.5 percent as of September 30, 2024. In the fourth quarter of 2024, we entered into an agreement to purchase approximately 1.0 percent of incremental ownership interests. Chubb has total outstanding agreements for approximately 1.6 percent of incremental ownership interests, pending completion of certain closing conditions. The acquisition of a controlling majority interest in Huatai Group on July 1, 2023, generated $3,458 million of Goodwill, attributable to expected growth and profitability, and $1,655 million of Other intangible assets. None of the goodwill is expected to be deductible for income tax purposes. Additionally, the acquisition generated $309 million of Value of business acquired (VOBA). Chubb financed the transaction through available cash on hand. Direct costs related to the acquisition are immaterial, and were expensed as incurred. These include one-time costs that are directly attributable to third-party consulting fees and other professional and legal fees related to the acquisition. The following table summarizes the fair value of the assets acquired and liabilities assumed on July 1, 2023.
Huatai Group assets and liabilities consolidated | July 1
(in millions of U.S. dollars) | 2023
Assets |
Investments and Cash | $ | 13,346 |
Accrued investment income | 60 |
Insurance and reinsurance balances receivable | 277 |
Reinsurance recoverable on losses and loss expenses | 581 |
Reinsurance recoverable on future policy benefits | 27 |
Value of business acquired | 309 |
Goodwill and intangible assets | 5,113 |
Other assets | 748 |
Total assets | $ | 20,461 |
Liabilities |
Unpaid losses and loss expenses | $ | 831 |
Unearned premiums | 800 |
Future policy benefits | 2,351 |
Policyholders' account balances | 4,014 |
Insurance and reinsurance balances payable | 644 |
Accounts payable, accrued expenses, and other liabilities | 682 |
Deferred tax liabilities | 232 |
Repurchase agreements | 1,269 |
Total liabilities | $ | 10,823 |
Net acquired assets, including goodwill, attributable to Chubb | 4,428 |
Net acquired assets, attributable to noncontrolling interests | 5,210 |
Net acquired assets, including goodwill | $ | 9,638 |
The following table summarizes the results of the acquired Huatai Group operations that have been included within our Consolidated statements of operations for both the three and nine months ended September 30, 2023:
(in millions of U.S. dollars) |  |  |  |  |  |  |
Total revenues |  |  |  |  |  |  | $ | 389 |
Net loss |  |  |  |  |  |  | $ | (11) |
Net loss attributable to Chubb |  |  |  |  |  |  | $ | (9) |
The following table presents supplemental unaudited pro forma consolidated information for the periods indicated as though the acquisition of a controlling majority interest in Huatai Group that occurred on July 1, 2023, had instead occurred on January 1, 2022. The unaudited pro forma consolidated financial information is presented for informational purposes only and is not necessarily indicative of the operating results that would have occurred had the acquisition of a controlling majority interest been consummated on January 1, 2022, nor is it necessarily indicative of future operating results. Significant assumptions used to determine pro forma operating results include amortization of VOBA and other intangible assets.
| Three Months Ended |  | Nine Months Ended
Pro forma: | September 30 |  | September 30
(in millions of U.S. dollars) | 2023 |  | 2023
Net premiums earned | $ | 12,674 |  |  | $ | 34,605 |
Total revenues | $ | 13,755 |  |  | $ | 37,589 |
Net income | $ | 1,905 |  |  | $ | 5,595 |
Net income attributable to Chubb | $ | 1,912 |  |  | $ | 5,587 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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