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Filed by: ACE Limited

Pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-6

of the Securities Exchange Act of 1934

Subject Company: The Chubb Corporation (C ommission File No. 001-08661)

Form S-4 File No.: 333-206056

The following is a transcript of the third quarter 2015 earnings conference call and webcast hosted by ACE Limited on October 21, 2015 at 8:30 a.m. (EDT).


Helen Wilson ACE Limited - SVP of IR

Evan Greenberg ACE Limited - Chairman & CEO

Phil Bancroft ACE Limited - CFO

Juan Andrade ACE Limited - EVP of ACE Group Personal Lines & COO of ACE Overseas General

Joe Wayland ACE Limited - EVP & General Counsel


Cliff Gallant Nomura International - Analyst

Michael Nannizzi Goldman Sachs - Analyst

Ryan Tunis Credit Suisse - Analyst

Josh Stirling Sanford Bernstein - Analyst

Jay Gelb Barclays Capital - Analyst

Sarah DeWitt JPMorgan - Analyst

Vinay Misquith Sterne, Agee & Leach - Analyst

Jay Cohen BofA Merrill Lynch - Analyst

Ian Gutterman Balyasny - Analyst

Brian Meredith UBS - Analyst



Good day and welcome to the ACE Limited third quarter 2015 earnings conference call. Todays conference is being recorded.

(Operator Instructions)

For opening remarks and introductions, I would now like to turn the call over to Helen Wilson, Investor Relations. Please go ahead.

Helen Wilson - ACE Limited - SVP of IR

Thank you and welcome to the ACE Limited September 30, 2015 third quarter earnings conference call. Our report today will contain forward-looking statements, including statements relating to company and investment portfolio performance;, pricing and business mix; economic and insurance market conditions; including foreign exchange; and completion and integration of acquisitions, all of which are subject to risks and uncertainties. Actual results may differ materially.

Please refer to our most recent SEC filings, as well as our earnings press release and financial supplement, which are available on our website, for more information on factors that could affect these matters. This call is being webcast live and the webcast replay will be available for one month. All remarks made during the call are current at the time of the call and will not be updated to reflect subsequent material developments. Now, Id like to introduce our speakers.

First, we have Evan Greenberg, Chairman and Chief Executive Officer, followed by Phil Bancroft, our Chief Financial Officer, then well take your questions. With us to assist with your questions are several members of our Management team. Now its my pleasure to turn the call over to Evan.

Evan Greenberg - ACE Limited - Chairman & CEO

Good morning. As you saw from the numbers, ACE had a great quarter with record earnings, record underwriting results, and good revenue growth in constant dollars. After-tax operating income of $897 million, or $2.74 per share, was driven by P&C underwriting income of almost $600 million.

Foreign exchange continued to cast a shadow in the quarter, impacting our premium revenue, income, and book value. Book value declined 1.5% due to FX and financial market volatility in both equity and fixed income markets. Our annualized operating return on equity was about 13%, an excellent return on shareholder capital.

Year to date, weve produced over $2.4 billion, or $7.38 per share, in operating income, which is essentially flat with prior year, in spite of about $85 million in foreign exchange headwinds. Strong underwriting gains and 6.5% premium revenue growth in constant dollars contributed to these results. Returning to the quarter, underwriting results were again simply excellent. Total P&C underwriting income growth was driven by strong, underlying current accident year results, positive prior period reserve development, and relatively low catastrophe losses.

The P&C combined ratio was 85.9% and the P&C current accident year combined ratio, excluding cat, was 89.2% versus 89.8% prior-year, so an improvement. All P&C divisions produced outstanding calendar year and current accident year results in the quarter. We were about two months into the conversion of the Firemans Fund business [stays paper]. We are on track and in fact, ahead of plan. As of today, both business retention and financial performance are ahead of our original projections. The retention rate as measured by premium is 87%.

The business we are not converting is in line with our expectations because it either does not meet our business profile our in our judgment is under priced. If you would like more color during the Q&A, Juan Andrade is prepared to answer your questions.

Weve produced $549 million in investment income, down about 3% on a reported basis and 1% in constant dollars. A very good results given the interest rate and equity market environment and adverse FX movement. We continue to benefit from strong operating cash flow.

Turning to revenue growth, global P&C net premiums, which exclude agriculture, grew nearly 8% in the quarter in constant dollars. Foreign exchange negatively impacted global P&C by 7.5 points, nearly equal to our underlying growth. In North America, net premiums for P&C, excluding crop, grew 11%. In our large commercial business, ACE USA, net premiums grew just over 2%. In our two wholesale E&S businesses, ACE Bermuda and ACE Westchester, net premiums grew about 4.5% and 2.5%, respectively. We grew 11.5% in ACE Commercial Risk Services, which serves small to mid-market clients for specialty products.

Premiums in our US personal lines business were up 86%, driven by the addition of the Firemans Fund business. Excluding Firemans Fund, our high net worth personal lines business grew 14%; our highest growth rate of the year as we are also benefiting from increased submission activity and new business from over 300 Firemans Fund agents newly licensed with ACE.

Premiums in our agriculture business declined 3.5% as expected, due to lower commodity prices and fund selection. The crop business is in good shape and from what we see today, it appears that it will be an average crop year in terms of profit and loss.

Turning to our international operations, P&C net premiums in ACE International were up 9% in constant dollars, driven by Latin America with strong growth of 22%. Premiums in Asia Pacific were up 8%, while premiums in Europe were down 1%. In our London-based E&S business, premiums were down 12% as we continue to shed business in the London wholesale market.

In our A&H insurance business, net premiums are up about 6% globally in constant currency. A&H premiums internationally were up about 5.5%, led by Asia with growth of 15%. Premiums for combined insurance were up about 5%.

Net premiums written for international personal lines were up 18% on a constant dollar basis. In our Asia-focused international life insurance business, premiums were up almost 9% in constant currency. And finally in our [Global Re] business net premiums declined 9.5% due to market conditions.

I want to now say a few words about current commercial P&C market conditions. The underwriting environment continued to grow more competitive in the quarter for our commercial P&C business globally. With some exceptions, price declines accelerated modestly, though it varied by class of business and geography. All of the themes weve been saying in previous quarters remain true. Large account business, particularly shared and layered, is more competitive than mid-sized, wholesale is more competitive than retail, and property more so than casualty-related.

For our US commercial P&C business, general and specialty casualty-related pricing was flat in the quarter. Management and professional liability pricing was down 0.5% and property-related pricing was down 9%. New business writings in North America were down year on year, as one would expect, but it varies by class depending on the rates and terms we could secure. So, in fact, new business was up in certain targeted classes, including specialty small commercial, personal lines, professional lines, and A&H. Renewal retention levels are holding up well.

For our US retail business, the renewal retention rate, as measured by premium, was 96%. Internationally, commercial P&C insurance market conditions also grew incrementally more competitive. Again, for the business we wrote, casualty rates were down 3%, property was down 7%, and financial lines rates were down 1%.

Generally speaking, pricing is not keeping pace with lost cost trends, though it varies by line and geography. We continue to execute strategies to ameliorate to the extent possible the impact of pricing on our combined ratio through a combination of mix shift, targeting classes with better margin, portfolio management that informs underwriting actions, including tighter individual risk selection, and pricing actions in more stressed areas. John Keogh, John Lupica, and Juan Andrade can provide further color on market conditions and pricing trends.

While the main event to talk about today and quarters to come Im sure is our merger with Chubb, I want to fill you in on where we stand. Were on track with obtaining all necessary regulatory approvals, in order to close hopefully early in the first quarter of 2016 as we had announced. We received necessary US antitrust clearance. As you all saw and we expect to announce, an overwhelmingly positive response from both companies shareholders following tomorrows extraordinary general meetings that will be held by each company.

Although the voting continues, based on the 80% of ACE shareholders who have cast their votes to date, approval of all Chubb-related proposals is running in the very high 90%s. We are making very good progress in our integration planning process. Things are moving very well with executives on both sides working in teams that represent all lines of business and support areas around the world addressing leadership, organizational structure, roles and responsibilities, and resource requirements.

Were also establishing teams to work on future growth initiatives. The chemistry between both sides is excellent. Communication is good and we are building a detailed road map for integration that will allow us to hit the ground running when we close.

Were learning more about each other and I think the admiration for each others people, business, and culture has only grown stronger. By way of a few examples, ACE people, starting with me, have a greater and growing appreciation for Chubbs renowned global claims and risk engineering capabilities, its US branch and agency distribution system, and its training capabilities. Chubb people have a greater appreciation for ACEs product breadth, global operations, risk appetite and insights, and speed at which we move.

Senior leadership is also working separately as a team to help facilitate cultural integration. Lastly, I will tell you that the reception we received from the agent and broker community, as well as from our customers, has been very supportive, very positive. For example, members of our senior management team from both ACE and from Chubb, including me, were in attendance two weeks ago at the Council of Insurance Agents and Brokers, or CIAB meeting, in Colorado Springs. It was an energy and an optimism in the room among our teams that signaled to our important distribution partners how excited we all are about our two companies coming together.

They all recognize the complementary nature of our companies. Frankly, the more we know and the more we learn about each other, the more bullish we are on the value creation opportunities we can create for our customers, our business partners, our employees, and our shareholders. With that, Ill turn the call over to Phil and then well come back and take your questions.

Phil Bancroft - ACE Limited - CFO

Thank you, Evan. In the quarter, investment income of $549 million benefited from our strong cash flow, private equity distributions, and call activity from our corporate bonds. Year to date, cash flow has essentially offset the impact of FX on our cash and invested assets, which are down $140 million on a reported basis and up $1.2 billion in constant dollars.

Our average new money rate is 2.9% versus our current book yield of 3.6%. For the past 12 months, our operating cash flow was $4 billion. As Ive said in previous calls, our strong cash flow has offset the impact of lower reinvestment rates and we expect this trend to continue.

Our cash flow for the third quarter was $808 million. There are a number of factors that impact the variability in investment income including the level of interest rates, prepayment speeds on our mortgages, corporate bond call activity, private equity distributions, and foreign exchange. We currently expect our quarterly investment income run rate to be $540 million.

Net realized and unrealized losses were $1.16 billion after tax. This included losses of $309 million in our investment portfolio, primarily due to widening of credit spreads on our corporate bonds, a $313 million loss from the mark-to-market impact on our variable annuity reinsurance business, and a $548 million impact on book value from foreign exchange.

FX impacted tangible book by $345 million. Our investments remain in an unrealized gain position of $1.3 billion after tax. Since September 30, we have recovered a substantial portion of these marks, almost $450 million, including a positive mark on the investment portfolio of $200 million.

Our net loss reserves were up $212 million, adjusted for foreign exchange, and our paid to incurred ratio was 94%. We had positive prior period development of $210 million pretax with about one quarter from short tail lines and three quarters from long tail lines from accident years 2010 and prior.

This included $76 million of adverse development for legacy environmental liability exposures in our Brandywine runoff operation, which is included in our North American segment. As a reminder, we conduct our environmental review in the third quarter and our asbestos review in the fourth. Our prior period development also included the positive impact from the release of $79 million of an individual legacy liability case reserve and our overseas general and global re segments.

Pre-tax catastrophe losses of $72 million came from a number of worldwide events, including $22 million from explosion in Tianjin, $5 million from the Chile earthquake, and a balance of other events, including US flooding and Asian typhoons.

In the quarter, the Firemans Fund business made a one-time contribution of 0.75 points to the improvement in the combined ratio, due to the underwriting gain from the portfolio assumption. However, note the Firemans Fund contributed only $20 million to operating income with underwriting gains substantially offset by purchase accounting. On the other hand, foreign exchange negatively impacted operating income by $36 million.

As you can see on page 4 of the supplement, our A&H constant dollar operating income was down $6 million compared to last years quarter. We had positive reserve development of $8 million in last years quarter and negative development of $5 million this quarter. Excluding development, earnings growth was 6.1%. This business continues to perform very well.

Also on page 4 of the supplement, youll see life operating income is down $8 million. This is principally due to the run off of the [BA] reinsurance book. We are finalizing our plans for our $5.3 billion debt issuance in connected with the Chubb acquisition. We will make announcement in the near future. Ill turn the call back to Helen.

Helen Wilson - ACE Limited - SVP of IR

Thank you. At this point, well be happy to take your questions.



(Operator Instructions)

Cliff Gallant, Nomura International.

Cliff Gallant - Nomura International - Analyst

Good morning. I have two questions. The first one -- and thank you, Phil, for the $22 million loss number for the Tianjin loss. When we see events like that in the news, from an insurance claim perspective, how should we think about losses like that? How does it differ from an event that we might see in the US?

And then my second question will really just follow up the -- you volunteered Juan Andrade to speak about the conversion rates of the high net worth business at Firemans, and I would love to hear more detail about it. How is the approach different between how Firemans is running and how you guys are? Are there any lessons that will applicable as you integrate another high net worth business?

Evan Greenberg - ACE Limited - Chairman & CEO

Your first question -- I dont know how to answer your first question because I dont know what youre asking, really. Can you be more specific or rephrase it? Its a man-made disaster that occurred in an urban center.

The only difference, Id say, really between that loss occurring in China than anywhere else has to do with the regulatory environment, and how you enforce the accumulation of toxic chemicals or other combustibles in an area like that. And so, the risk management, generally, and infrastructure of a more developing country versus a developed country. But other than that, if thats what youre getting at, theres an answer. Other than that, Im not sure I understand the nature of the question.

Cliff Gallant - Nomura International - Analyst

That is a good answer. I appreciate that.

Evan Greenberg - ACE Limited - Chairman & CEO

Again, on personal lines, before we dive into it, what would you like to know?

Cliff Gallant - Nomura International - Analyst

What is the conversion rate of the business -- of Firemans today? What challenges have you had? Have there been any surprises? Are there lessons applicable that youll apply when you look at the Chubb book?

Evan Greenberg - ACE Limited - Chairman & CEO

Before Juan gets into that with you, I want to make sure you understand something about the Chubb book versus the Firemans Fund. In the Firemans Fund, its a conversion. We are literally having to convert the customer from the policy they had with Firemans Fund, the statutory paper, to ACE paper. We did not buy the insurance company. We bought the renewal rights to the business. When you put Chubb and ACE together, there is going to be no conversion. The customers will remain on the paper they were on.

With that, let me turn it over to Juan.

Juan Andrade - ACE Limited - EVP of ACE Group Personal Lines & COO of ACE Overseas General

Thank you, Evan. Cliff, what I would say, really, to start is a couple of things. I would reinforce the fact that our premium retention is running at roughly around 87%, which is really better than the expectations that we had when we did this deal.

Secondly, and as Evan mentioned, when we look at the total return aspect of the underwriting income from this business, its also running better than what we expected. I think in the six or so months since we closed this deal back on April 1, we have been able to successfully integrate over 500 new colleagues from the Firemans Fund. Were very pleased with the talent and the skill that they have brought. Weve created two new centers, one in OFallon, Missouri, and one in Bethlehem, Pennsylvania, that have really deepened our ability to provide even better claims service, even better operational servicing capabilities to our customers.

In addition to that, weve also onboarded about 357...