CHIEF EXECUTIVE'S
STATEMENT

Introduction

Character and principles are proven most in adversity, and the extraordinary economic adversity of recent times has proven a tough – sometimes fatal – test of businesses worldwide.

In challenging times, the temptation is towards nervous short-termism. Like the broader economy, this is true of the property and casualty insurance industry. Prices drop and underwriting integrity suffers as insurance carriers scramble to secure new business in the marketplace. The results can be chaotic.

Over the course of its 128 year history, the Chubb Group of Insurance Companies (“Chubb”) has remained true to its principles of rigorous underwriting discipline, specialist focus and careful investment. Consistent with all of Chubb’s operations, these principles are at the core of Chubb Insurance Company of Europe SE’s (“CICE”) operating philosophy.

Naturally, Chubb shares the same concerns and pressures as any insurer in such a soft market. But we refuse simply to meet the lowest prices around, or to rush into new areas of business which are not suited to our specialist expertise.

Our principles may limit our opportunities to grow the top line in a soft market. But it has never been the Chubb way to grow purely for growth’s sake. That approach has inherent risks that can cause significant problems at a later date. We believe our principles will continue to serve us well in the long term.

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2009: Weathering the storm

CICE has emerged strongly from the economic storm that began in 2008, having performed well against the Key Performance Indicators of net written premium growth, net combined ratio, profitability, total assets and shareholders’ funds. CICE has contributed to Chubb’s strong financial results notwithstanding the challenging economic times and continues to deliver bottom line profitability with a net combined ratio of 84.1% contributing to the profit before tax of £194.5 million in 2009. At CICE, we have a very well balanced insurance portfolio of excellent business across all lines of business and across the main geographic regions within the UK & Ireland and Continental Europe.

CICE has shown itself as one of the strongest companies in the industry in financial terms. This strength is demonstrated by the growth in CICE’s shareholders’ funds to £1,127.6 million from £1,012.5 million, as well as maintaining our AM Best’s A++ Financial Strength during 2009.

As a result of our disciplined underwriting and our careful and considered approach to investments, CICE enters 2010 in a very strong financial position. At the same time, CICE has remained true to Chubb’s customer focused operating philosophy – our commitment to providing exceptional, value-added services to our business partners and customers has not wavered in the face of global economic turmoil. This commitment will carry on into 2010 and beyond.

Over the past few years, CICE has gone through a major structural change with the transfer, inclusive of all the related capital requirements, to full Financial Services Authority (“FSA”) registration from 1 January 2009. Throughout this transfer CICE has maintained its financial stability, strong capital base and customer focus.

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The year ahead

In times of uncertainty, many customers seek out the names they trust. We believe Chubb is one such name. Our reputation for financial strength, underwriting expertise and claims handling counts more than ever in difficult times. With the industry in flux, the importance to customers of the balance sheet strength of their insurance providers continues to grow.

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A global name for a global market

As the reach of our customers continues to broaden around the globe, they require an insurance company with the expertise to provide coverages tailored to the particular needs of a multi-national business. As a genuinely global organisation, Chubb is much more than a loose collection of local entities, with local outlooks. The company has the reach, experience and expertise to deliver the service multi-national customers demand.

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Different solutions for different needs

CICE consistently strives to remain a vigorous, innovative leader in the market. In 2010, success will depend in large part on getting smarter about the way we do business.

Going forward, we need to align our value propositions more closely to the needs of the different customers and distribution systems the company serves.

It is self evident that a multinational company has very different insurance needs from a smaller, local business. We must focus on clarifying those different needs, and adapting our approach to meet them. This is the key to delivering value not only for distributors but also for customers.

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Confidence for the future

Since assuming the CICE Chief Executive role on 1 May 2009, I have been hugely impressed with the quality of our people across the business. I would like to thank everyone for their contribution to CICE’s excellent results in 2009.

The keys to CICE’s success in 2010 are sustained profitability, further enhancement of our focus on the varying needs of customers and distribution systems, and our multinational network.

I am in no doubt about the challenges of the current climate. But I am equally confident of our ability to thrive on those challenges. We will do so by staying true to our traditional strengths and aligning our service ever more closely to the different, and changing, needs of the markets we serve.

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Michael Casella
Chief Executive

18 March 2010

2008 and prior figures represent the merged results of Chubb Insurance Company of Europe SA and Chubb Insurance Company of Europe plc, the companies that merged to form Chubb Insurance Company of Europe SE. Amounts relating to Chubb Insurance Company of Europe SA have been restated to United Kingdom Generally Accepted Accounting Practice from the amounts originally filed in Belgium.