Chubb Limited (CB): PESTLE Analysis [Nov-2025 Updated]

You're looking for the real drivers behind Chubb Limited's (CB) stock performance and future margin growth, not just the headlines. Honestly, the PESTLE analysis for 2025 shows a clear split: global political instability is defintely a near-term headwind, especially for specialized lines, but the ongoing hard market cycle in property and casualty (P&C) insurance, plus their aggressive push into artificial intelligence (AI) and digital tech, presents a massive opportunity for them to expand their underwriting margins and cut expense ratios. You need to see how these six macro-forces translate into clear actions for your portfolio.

Chubb Limited (CB) - PESTLE Analysis: Political factors

Increased geopolitical instability raises political risk insurance demand.

You can't ignore the fact that global political instability is a massive tailwind for Chubb Limited's specialty lines, specifically political risk insurance (PRI). Honestly, when the world feels more volatile, demand for protection against that volatility jumps. A May 2025 industry survey of multinational corporations with over $1 billion in revenue projected that the demand for Credit and Political Risk Insurance (CPRI) is likely to rise by 33% due due to increasing tariff uncertainty and a generally unstable trading environment.

This is a clear opportunity for Chubb, which is a major player in this space. They offer coverage for a range of risks, including asset seizure (confiscation), political violence, forced abandonment of overseas operations, and currency inconvertibility. The total premium base for the broader CPRI and surety market is substantial, sitting at around US$49 billion, which rivals other high-profile specialty markets.

Here's the quick math: more global uncertainty means more multinational companies paying higher premiums to transfer that risk, which directly boosts Chubb's top-line revenue in a high-margin business. That's a good trade for them.

Trade tensions, especially in Asia, affect global commercial insurance lines.

Trade tensions, particularly between the US and China, create a complex political risk for Chubb's global commercial lines. While the company's CEO, Evan Greenberg, has publicly called for greater consistency in U.S. trade policy, warning that tariffs increase the risk of an economic downturn, Chubb's Asia business is still growing fast.

Asia is a critical growth engine, accounting for 13% of Chubb's year-to-date 2025 gross premiums written. In the third quarter of 2025 alone, the Asia region's premium growth was a strong 14.3% year-over-year, with Overseas General commercial lines growing 5.8%. This growth is defintely a positive, but it also means a greater exposure to political decisions like new tariffs, sanctions, or trade restrictions that could disrupt supply chains and trigger commercial policy claims (e.g., business interruption or trade credit losses).

The core political risk is that a sudden, sharp escalation in trade conflict could quickly turn a high-growth region into a high-loss one. You have to watch the rhetoric coming out of Washington and Beijing closely.

Regulatory scrutiny on systemic risk in the financial sector remains high.

The regulatory environment, especially in the US, is increasingly concerned about systemic risk (the risk of collapse of an entire financial system) posed by large, interconnected financial institutions, including major insurers. In November 2025, the chairman of UBS Group AG warned of a 'looming systemic risk' in the US insurance industry, citing weak and complex regulations.

This concern largely stems from the rapid growth of private financing, with US life insurers allocating nearly one-third of their $5.6 trillion in assets to private debt. While Chubb is a diversified Property and Casualty (P&C) giant, its size and international presence mean it is always under the microscope of regulators like the Financial Stability Oversight Council (FSOC) in the US and the Prudential Regulation Authority (PRA) in the UK. Regulators in 2025 are also intensely focused on the use of Artificial Intelligence (AI) in underwriting and pricing, as well as maintaining insurer solvency.

For Chubb, this means a constant need to demonstrate robust governance and conservative risk management to avoid being designated as a Systemically Important Financial Institution (SIFI), which would trigger stricter capital requirements and oversight.

US federal and state government response to natural catastrophes dictates reinsurance cost.

The government's role in managing natural catastrophe risk-or failing to manage it-directly affects the cost of reinsurance, which Chubb both buys and sells. Global insured losses from natural catastrophes are estimated to hit $105 billion in the first nine months of 2025, marking the sixth consecutive year over $100 billion.

The US is bearing the brunt of these losses, with the total economic losses in the first half of 2025 reaching a staggering $126 billion. State-level political decisions on building codes, land use, and how public disaster funds are allocated directly influence the severity of insured losses. When state-backed insurance programs struggle, like in hurricane-exposed Florida, private insurers like Chubb have to step in or pull back, which is a political decision in itself. Chubb's catastrophe losses for Q2 2025 were $630 million before tax.

As a P&C reinsurer, with Global Reinsurance accounting for 3% of its YTD 2025 net premiums written, Chubb benefits from higher reinsurance pricing driven by these losses, but it is also exposed to the risk of governments offloading more uninsurable risk onto the private market.

Political Factor	Near-Term Impact on Chubb Limited (CB)	2025 Key Metric/Value
Geopolitical Instability	Drives higher demand and premium growth in Political Risk Insurance (PRI) lines.	Projected PRI Demand Increase: 33%
US-Asia Trade Tensions	Creates risk for commercial lines exposure, especially in high-growth markets.	Asia Premium Growth (Q3 2025): 14.3% YoY
Systemic Risk Scrutiny	Increases compliance costs and potential for stricter capital rules (SIFI designation risk).	US Life Insurer Private Debt Allocation: Nearly 1/3 of $5.6 trillion in assets
US Catastrophe Response	Influences reinsurance pricing and exposure due to escalating climate-related losses.	Global Insured Catastrophe Losses (9M 2025): Estimated $105 billion

The key takeaway is that political decisions, from trade tariffs to climate policy, are now just as important to Chubb's financial performance as interest rates or underwriting cycles.

• Monitor US trade policy for new tariff announcements.
• Track state-level legislation on climate resilience and building codes.
• Watch for new federal guidance on AI use in insurance.

Finance: Analyze the capital impact of a potential SIFI designation by Q1 2026.

Chubb Limited (CB) - PESTLE Analysis: Economic factors

Global inflation, particularly social inflation, drives up claims costs for liability lines.

You need to be defintely focused on the claims severity trend, because it's a direct hit to your underwriting margin. General inflation-the rising cost of goods and services-is one thing, but the bigger headwind for Chubb Limited is what we call social inflation (the rising cost of insurance claims driven by societal and legal factors).

This phenomenon, fueled by plaintiff-friendly juries and litigation funding, is pushing up the size of jury awards. In 2025, this trend is marking a tipping point for the industry, with nuclear verdicts (those exceeding $10 million) and thermonuclear verdicts (those exceeding $100 million) at an all-time high. Chubb's CEO, Evan Greenberg, has specifically highlighted the need to watch claims inflation related to goods and labor costs for short-tail lines, but the long-term liability lines are where the real pressure builds. For the broader commercial lines industry, this higher-than-expected loss pattern from social inflation added over $200 billion to ultimate losses between 2009 and 2024. That's a massive number, so Chubb must continue to price for this risk with precision.

The hard market cycle continues, allowing for significant premium rate increases across P&C.

The good news is that the Property & Casualty (P&C) market remains 'hard,' meaning capacity is constrained and prices are rising, which is a strong tailwind for Chubb Limited. You can see this directly in the company's recent earnings, where they are achieving substantial premium growth.

For the second quarter of 2025, P&C net premiums written grew by 5.2% (or 5.8% in constant dollars). This pricing power is most evident in key segments:

• North America Personal Insurance saw premiums jump by 9.1% in Q2 2025.
• Overseas General P&C premiums grew by 10.2% in constant dollars.
• The P&C combined ratio-a key measure of underwriting profitability-improved to a record 81.8% in Q3 2025.

A combined ratio well below 100% means the company is making a profit on underwriting alone. That's a great sign for the core business. Still, watch out for softening prices in certain areas, like large account property insurance, where competition is starting to creep back in.

Higher interest rates boost investment income on Chubb Limited's $165.996 billion investment portfolio.

The rise in global interest rates over the last few years is a clear benefit for an insurer like Chubb Limited, which holds vast reserves of cash and fixed-income securities. The company's total investment portfolio stood at approximately $165.996 billion as of the Q3 2025 10-Q filing. This is where the float-the money held between collecting premiums and paying claims-is put to work.

Higher rates translate directly into higher net investment income (NII). The company has done a great job capitalizing on this environment:

Metric	Q3 2025 Value	Year-over-Year Change
Adjusted Net Investment Income (NII)	Record $1.8 billion	Up 8.3%
Fixed Income Portfolio Yield	5.1%	N/A
Q4 2025 NII Guidance (Expected Range)	$1.775 billion to $1.81 billion	N/A

Here's the quick math: a 5.1% yield on a portfolio of this size provides a powerful and stable source of earnings that offsets volatility in the underwriting business. This investment income growth is a major driver of the expected double-digit growth in core operating income and EPS.

Currency volatility, given operations in 54 countries, impacts reported earnings.

Chubb Limited operates in 54 countries and territories, making it a truly global insurer. This diversification is a strength, but it also creates exposure to foreign currency fluctuations when translating local results back into U.S. dollars for reporting.

Currency volatility, particularly a strong U.S. dollar, can mask underlying business growth. For example, in the first quarter of 2025, unfavorable foreign currency movement impacted core operating income by $36 million, or $0.09 per share. The good news is that management tracks results in 'constant dollars' to show the true operational performance, with consolidated net premiums written growing 5.7% in constant dollars in Q1 2025, compared to a lower reported GAAP growth rate. To be fair, the CEO has noted that as a multinational, the company's revenue and income benefit from a weaker dollar, so it cuts both ways. You just need to look past the headline numbers to the constant-dollar figures for the real story.

Chubb Limited (CB) - PESTLE Analysis: Social factors

Rising public awareness of climate change increases demand for specialized risk products.

You are defintely seeing a social shift where climate change is no longer just an environmental issue; it is a core financial risk, and that drives demand for what we call 'specialty risk products.' For Chubb Limited, this is a clear opportunity, but it comes with a major cost headwind.

The public and corporate awareness of physical climate risk is rising fast. For context, industry-wide climate-related insurance claims increased by a staggering 250% between 2010 and 2022. This volatility demands new insurance solutions. Chubb's response is its dedicated global practice, Chubb Climate+, which is focused on renewable energy and climate technology risks. The company committed $1.5 billion to sustainable insurance products in 2022, and to support this growth, they added 20 dedicated underwriters to the practice in 2024.

Still, the risk is real. The California wildfires alone delivered a pre-tax catastrophe blow of nearly $1.64 billion to Chubb's bottom line in Q1 2025. That's a huge number, and it shows why pricing this risk correctly is the ultimate test of underwriting discipline. The demand for solutions is high, but the price of getting it wrong is higher.

Social inflation-the rising cost of insurance claims due to litigation trends-is a major headwind.

Social inflation, which is the industry term for the rising cost of insurance claims that exceeds general economic inflation, is one of the most persistent and costly social trends we face. It's driven by a few things: plaintiff-friendly juries, anti-corporate sentiment, and the rise of litigation funding (LitFin). Chubb's CEO, Evan Greenberg, has called this excessive litigation an 'unproductive tax on business and on society.'

This trend hits commercial liability lines the hardest. Here's the quick math on the industry-wide impact: the higher-than-expected loss pattern, which is a proxy for social inflation, added in excess of $200 billion to commercial lines' ultimate losses for the industry from 2009-2024. For a single line, like commercial auto, the added cost for the industry in 2024 was estimated at nearly $8 billion. Chubb maintains an industry-leading underwriting discipline, with an overall P&C combined ratio of 86.6% in 2024, which is a gold standard, but the pressure is unrelenting.

The core issue is that casualty rates must keep pace with these elevated legal costs, or underwriting margins will erode. Chubb is actively working to catalyze a long-term campaign with corporate America to address this problem state by state.

Shifting demographics in key markets influence demand for life and accident insurance products.

Demographic shifts create predictable, long-term demand for specific insurance products, especially in life and accident lines. The U.S. population is aging, with projections showing that 20% of the population will be 65 or older by 2030.

This demographic reality translates directly into increased demand for annuities and protection products. Chubb is capitalizing on this. In Q1 2025, the company's Life Insurance premiums surged 10.3% in constant dollars, which is a strong growth signal, driven by this demand. The senior market insurance segment is a key focus, and it generated $2.4 billion in revenue for Chubb in 2022, with a year-over-year growth of 12.5%.

Here is a snapshot of how this social factor is playing out in Chubb's business segments:

Insurance Segment	Key Demographic Driver	2022 Revenue/Premium	Q1 2025 Growth Rate (Constant Dollars)
Senior Market Insurance	Aging U.S. Population (20% 65+ by 2030)	$2.4 billion (2022 Revenue)	N/A (Segment Growth 12.5% YoY in 2022)
Life Insurance	Demand for Annuities/Protection Products	N/A (Part of overall $51.5B Net Premiums Written in 2024)	10.3% Surge in Q1 2025

Talent wars in data science and underwriting affect operational costs and innovation speed.

The complexity of modern risk-from climate change to cyber threats-means that the war for talent in specialized areas like data science, actuarial science, and expert underwriting is intense. Chubb recognizes that digital capabilities are critical for data-driven decisions and underwriting excellence.

The company is making a significant investment to compete. Chubb is spending between $1.1 billion and $1.2 billion annually on modernizing its legacy systems. This massive technology spend requires a highly skilled workforce to execute. To cultivate this talent internally, Chubb runs the Chubb Academy, a 24-month program designed to develop underwriting skills and digital capabilities for early-career professionals.

The focus is on specialized, forward-looking roles:

• Hiring 20 dedicated underwriters for the Chubb Climate+ practice in 2024.
• Recruiting Data Scientists with 5+ years of experience for loss cost modeling and risk assessment.
• Appointing new regional leadership, like the Head of Talent Acquisition for Chubb Japan in July 2025, to align global hiring with local growth plans.

The operational cost of acquiring and retaining this expertise is rising, but it's a non-negotiable investment to maintain underwriting discipline and drive innovation. You have to pay for the best to price the most complex risks.

Chubb Limited (CB) - PESTLE Analysis: Technological factors

Artificial intelligence (AI) and machine learning are being used to improve underwriting precision.

Chubb Limited's core strategy centers on superior underwriting, and Artificial Intelligence (AI) and machine learning (ML) are now essential tools for maintaining that edge. The company is investing heavily to expand its data, analytics, and AI capabilities across the entire value chain-from marketing to underwriting to claims. This isn't just a buzzword; it's about embedding deep-learning models to refine risk selection and pricing, which directly impacts profitability.

For example, Chubb launched an AI-powered optimization engine within its embedded insurance technology platform, Chubb Studio, in late 2025. This engine analyzes data to deliver personalized insurance offerings at the point of sale, boosting conversion rates for its digital distribution partners. The impact of this data-driven underwriting discipline is evident in the firm's financial results. In Q1 2025, the P&C current accident year combined ratio (excluding catastrophe losses) improved to 82.3%, a 1.4-percentage-point improvement over the prior year, demonstrating a tangible return on this technological investment.

Digital transformation efforts aim to cut expense ratios by automating claims and policy issuance.

The digital transformation at Chubb is explicitly geared toward operational efficiency and maintaining its industry-leading expense ratio. CEO Evan Greenberg noted that technology helps to 'maintain what is the best expense ratio in the industry and, over time, even lower that expense ratio.' This focus on automation, particularly through legacy modernization for straight-through processing, aims to reduce the administrative expense component of the combined ratio.

The firm's annual investment in technology is substantial, ranging from $1.1 billion to $1.2 billion. Roughly 45% to 50% of this capital is dedicated to development, including new AI capabilities and legacy modernization. While the full-year 2024 expense ratio stood at a strong 26.2%, the Q1 2025 expense ratio was 27.9%, showing the continuous pressure to automate and control costs in a high-inflation environment. Here's the quick math on the tech spend:

Metric	2024 Full Year / 2025 Q1 Data	Significance
Annual Technology Investment	$1.1-$1.2 billion	Commitment to modernization and AI.
Development Investment (Est.)	~$495-$600 million (45%-50% of total)	Direct spend on new capabilities, including automation.
2024 Expense Ratio	26.2%	Industry-leading efficiency benchmark.
2025 Q1 Expense Ratio	27.9%	Automation efforts are crucial to bring this back down.

Increased cyber risk necessitates continuous investment in cybersecurity for client data protection.

Chubb recognizes that cyber risk is not only a product line but also the single greatest threat to its own operations and clients. Its Risk Decisions 360° report from January 2025 identified cybersecurity and technology disruption as the primary threats to business growth. This reality mandates continuous, prioritized investment in internal cybersecurity infrastructure to protect the confidentiality and integrity of its vast amounts of client data.

The Board maintains direct oversight through its Audit and Risk & Finance committees, and management has a Cyber Advisory Board with deep expertise. The risk is real: 40% of executives surveyed in Chubb's 2025 report cited cyber breaches and data leaks as the most disruptive man-made threats. To mitigate this for its policyholders, Chubb has strategically partnered with third-party security providers. For instance, the partnership with SentinelOne, established in late 2023, provides Chubb's cyber insurance policyholders with enhanced cyber risk management tools.

Telematics and Internet of Things (IoT) data are reshaping personal and commercial auto risk modeling.

The integration of the Internet of Things (IoT) is moving beyond simple data collection; it's becoming a loss-prevention service offered directly to clients. While Chubb is a key player in the telematics-based auto insurance market, which is projected to grow at a Compound Annual Growth Rate (CAGR) of 16.56% from 2025 to 2035, its most explicit use of IoT is in property lines, which informs its broader risk modeling approach.

Through its company, StreamLabs, Inc., Chubb provides commercial and personal lines clients with a turnkey IoT monitoring program. This program uses small, non-invasive sensors to detect potential hazards in real-time, focusing primarily on water damage, which is a major source of property loss. This capability shifts the insurance model from simple risk transfer to active risk mitigation. This is defintely a smart way to cut down on claims costs.

• Detect water leaks, burst pipes, and temperature changes.
• Provide 24x7 monitoring and real-time alerts to clients.
• Use LoRaWAN® technology for reliable sensor data transmission.
• Help prevent catastrophic losses in high-value properties and commercial facilities.

Chubb Limited (CB) - PESTLE Analysis: Legal factors

You need to see the legal landscape not just as a cost center, but as a dynamic risk-transfer environment that directly shapes your underwriting profitability. For Chubb Limited, the core legal risks in 2025 stem from global data regulation, the rise of climate-related litigation, and the fragmented, protectionist nature of state-level insurance laws. These factors demand a defintely proactive and expensive compliance strategy.

Stricter data privacy laws, like the EU's GDPR, increase compliance costs globally.

The global patchwork of data privacy legislation, led by the European Union's General Data Protection Regulation (GDPR), creates a massive compliance burden for a global insurer like Chubb, which operates in 54 countries and territories. This isn't just about internal IT spend; it's a direct liability exposure. The company's Audit Committee in 2025 is actively overseeing legal, regulatory, and compliance matters, specifically including data protection laws, as noted in the 2025 Proxy Statement. This oversight is a necessity.

The financial risk is concrete. For instance, in July 2025, a Chubb unit was sued by Yahoo Inc. seeking insurance coverage over potential regulatory fines for violating the GDPR. This case highlights how Chubb, as a major cyber risk insurer, is directly entangled in the financial fallout of these laws, both as a risk carrier and a potential target. The sheer cost of managing data across jurisdictions-from data mapping to breach notification protocols-is a continuous, high-priority expenditure that doesn't generate revenue. It's a cost of doing business globally.

Litigation trends regarding climate-related disclosures and ESG claims pose legal risks.

Shareholder activism and regulatory focus on environmental, social, and governance (ESG) disclosures are translating into tangible legal risks for Chubb. Investors, like Green Century Capital Management, are increasingly using shareholder proposals and public pressure to demand more stringent climate action and transparency, particularly around Scope 3 emissions (the emissions from their insured and invested assets). While Chubb successfully rejected a 2024 shareholder proposal requesting a report on these emissions, arguing the data is not actuarially sound for assessing climate risk, the pressure remains.

The primary legal risk is the potential for 'greenwashing' claims or breaches of stated corporate policies. A notable example from July 2025 is the controversy over Chubb allegedly reversing its 2019 coal policy by taking on a lead reinsurer role for a coal-fired power plant in Vietnam. This action immediately drew criticism from shareholder advocates who view it as a breach of commitment, creating a clear legal vulnerability for both reputational and fiduciary duty claims.

Legal Risk Area (2025 Focus)	Impact on Chubb Limited (CB)	Quantifiable Data Point
Data Privacy (GDPR)	Increased compliance costs and liability exposure for regulatory fines.	In July 2025, a Chubb unit was sued by Yahoo Inc. over potential EU GDPR fines.
ESG/Climate Litigation	Risk of 'breach of policy' or 'greenwashing' claims from investors and activists.	Chubb allegedly took on lead reinsurer role for a Vietnam coal plant in July 2025, contradicting its 2019 coal policy.
International Capital Rules	Need for flexible capital management to meet diverse local solvency requirements.	Shareholders approved a 20% capital band renewal in May 2025 to allow for flexible capital changes.

Regulatory changes in international markets require complex local licensing and capital management.

As a Swiss-domiciled global insurer, Chubb must contend with a complex web of international solvency and licensing requirements. The regulatory environment is tightening, particularly in the wake of global financial stability concerns. In May 2025, Chubb shareholders approved the renewal of a capital band, which authorizes the Board of Directors to increase or decrease the company's share capital by up to 20% until May 15, 2026. This move provides the necessary flexibility to quickly adjust capital structure to meet varied, and often stricter, local regulatory demands without the delay of a full shareholder vote.

In the Asia Pacific region, for example, 2025 regulations require insurers in some jurisdictions to maintain a solvency margin of no less than 120% of their Prudential Capital Requirement. Chubb's extensive global footprint means it must dedicate significant legal and compliance resources to ensure local licensing and capital rules are met in all 54 countries and territories it operates in. This isn't a one-time fix; it's a perpetual, country-by-country legal challenge.

US state-level legislative changes on property insurance coverage directly impact profitability.

The most immediate impact on Chubb's profitability comes from legislative changes in key US property and casualty (P&C) markets, particularly those facing high catastrophe (CAT) risk. State legislatures in 26 states enacted homeowners' and renters' insurance legislation in the 2025 session, often in response to rising premiums and reduced availability.

These laws directly limit an insurer's ability to manage risk and price policies. For example, in Florida, 2025 reforms like HB 1611 impose new restrictions on surplus lines insurers-which Chubb utilizes-prohibiting cancellation or nonrenewal of residential policies until 90 days after repairs are completed following a state of emergency. This extends the insurer's exposure. Plus, the trend of 'nuclear verdicts' (jury awards of $10 million or more) is a major cost driver, with Texas and the Southwest seeing $14.5 billion in such awards in 2023, a trend that directly elevates liability insurance costs, forcing Chubb to raise rates or reduce coverage.

• Florida's HB 939 mandated clear, 14-point font notice of policy changes by January 1, 2025.
• Colorado's 2025 legislation requires insurers to submit wildfire model data with rate filings, increasing regulatory scrutiny on pricing.
• Rising litigation and CAT losses are evident in Chubb's Q1 2025 results, which were 'overshadowed by the significant catastrophe losses... from the California wildfires.'

This state-level legislative activity forces Chubb to constantly adjust underwriting guidelines, policy language, and pricing models, which is a massive administrative and legal undertaking.

Chubb Limited (CB) - PESTLE Analysis: Environmental factors

Increased frequency and severity of secondary peril events (e.g., wildfires, floods) drive up catastrophe losses.

You're seeing it in the numbers: climate change is fundamentally altering the risk profile for insurers, pushing what were once considered secondary perils-like wildfires, floods, and severe convective storms-into primary drivers of loss. This isn't just theory; it's a direct hit to Chubb Limited's bottom line in 2025.

The first half of the year showed the stark reality. In the first quarter of 2025 alone, Chubb reported pre-tax net catastrophe losses totaling $1.64 billion. The vast majority of that, $1.47 billion, was directly attributed to the California wildfires, a classic secondary peril event. That single event added 15.9 percentage points to the combined ratio for the quarter. For context, Q2 2025 saw another $630 million in pre-tax catastrophe losses, an increase from the $580 million reported in the same quarter last year. Chubb has responded by strategically reducing its exposure in wildfire-prone areas of California by over 50%. That's a clear, necessary action to manage the new climate reality.

Here's the quick math on the near-term volatility:

Metric	Q1 2025	Q2 2025	YoY Change (Q2 '25 vs Q2 '24)
Pre-Tax Net Catastrophe Losses	$1.64 billion	$630 million	Up from $580 million
California Wildfire Losses (Q1 2025)	$1.47 billion	N/A	N/A
P&C Combined Ratio (Q1 2025)	95.7%	85.6%	Improved from 88.3% (Q2 2024)

Pressure from stakeholders and regulators for robust Environmental, Social, and Governance (ESG) reporting.

The demand for transparency on climate risk is intense, coming from both shareholders and global regulators. Chubb is navigating a complex landscape, particularly around what data to disclose.

The company's 2024 Sustainability Report, published in April 2025, confirmed alignment with the International Sustainability Standards Board (ISSB) S-1 and S-2 Standards, and it meets the disclosure requirements for both the Swiss Climate Disclosure Ordinance and the U.S. National Association of Insurance Commissioners (NAIC) Climate Risk Disclosure Survey. Still, a shareholder proposal in early 2025 pushed for a report disclosing Scope 3 emissions-the indirect emissions from its underwriting and investment portfolios. Chubb is defintely pushing back on this, arguing that Scope 3 emissions aren't a useful metric for them.

Instead, Chubb maintains that its existing metrics provide superior insight into physical climate risk exposure:

• Probable Maximum Loss (PML) table, which quantifies estimated loss in dollars and as a percentage of shareholders' equity from modeled natural catastrophes.
• The P&C Combined Ratio, which directly reflects underwriting profitability factoring in catastrophe losses.
• Metrics for the Chubb Climate+ business unit, which focuses on underwriting for the energy transition.

The company's climate strategy is governed at the highest level, with oversight from the CEO and the management Executive Committee, which is what you want to see.

The company is actively reducing exposure to thermal coal and other high-carbon industries.

Chubb was an early mover in restricting high-carbon exposure, but its commitment is now under scrutiny. The long-standing policy, adopted in 2019, established a clear line: no new underwriting or investments in companies that generate more than 30% of their revenue or energy production from thermal coal. The phase-out for existing risks exceeding this threshold was largely complete by the end of 2022.

However, this is not a clean break. A July 2025 report alleged that Chubb took on the role of lead reinsurer for a new coal-fired power plant in Vietnam, reportedly offering a substantial discount on the premium. This kind of move creates significant reputational risk and raises questions about the firm's long-term commitment to its stated climate policy.

On the transition side, the company is actively applying technical underwriting criteria to other high-emitting sectors:

• Oil and Gas: Large producers (over $1 billion in revenue) are expected to achieve a methane emissions intensity of 0.2% or less by 2030.
• Steel Production: New underwriting criteria were introduced in March 2025 for companies operating blast furnaces.
• Cement: New build facilities must be designed to be carbon capture ready.

Climate-driven migration and coastal property devaluation affect long-term real estate risk models.

The physical risk of climate change is translating into financial risk for the real estate market, which directly impacts Chubb's property underwriting models and investment portfolio. A February 2025 study from the First Street Foundation estimates that climate-related risks could reduce U.S. real estate values by $1.4 trillion over the next 30 years.

This devaluation is driven by two factors: the physical damage from events like flooding and the subsequent climate-driven migration. The study projects that flooding alone will cause 11.9 million Americans to relocate by 2055. This mass movement creates new risk concentrations in previously low-risk areas and hollows out coastal or flood-prone communities.

The modeling highlights several critical segments for property insurers:

• Climate Abandonment: 26% of neighborhoods show sustained population loss due to climate change.
• Tipping Point: 27% of neighborhoods are at risk, showing initial growth followed by decline as rising insurance premiums and climate impacts become unsustainable.

For Chubb, this means the risk models used for pricing and capital allocation must constantly adapt to a non-stationary (non-stable) risk environment. The proactive reduction of exposure in high-risk areas, like the over 50% cut in California wildfire zones, is a necessary step, but the long-term challenge is the systemic devaluation across the entire US coastal and flood-exposed portfolio. Finance: review the latest First Street Foundation data and map the 'Tipping Point' tracts against our North American Personal P&C portfolio by the end of the quarter.