Chubb LtdCB
Chubb Ltd Income Taxes Disclosure
Taxation
Under Swiss law a resident company is subject to income tax at the federal, cantonal, and communal levels that is levied on net worldwide income. Income attributable to permanent establishments or real estate located abroad is excluded from the Swiss tax base. Furthermore, participation relief (i.e., tax relief) is granted to Chubb Limited at the federal, cantonal, and communal level for qualifying dividend income. Chubb Limited is subject to an annual cantonal and communal capital tax on the taxable equity of Chubb Limited in Switzerland.
Chubb has two Swiss operating subsidiaries, an insurance company, Chubb Insurance (Switzerland) Limited and a reinsurance company, Chubb Reinsurance (Switzerland) Limited. Both are subject to federal, cantonal, and communal income tax and to annual cantonal and communal capital tax.
Under Bermuda law prior to 2025, Chubb Limited and its Bermuda subsidiaries were not required to pay any taxes on income or capital gains. However, on December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act of 2023 which established a 15 percent income tax on net taxable income of Bermuda entities effective January 1, 2025.
Income from Chubb's operations at Lloyd's is subject to United Kingdom (U.K.) corporation income taxes. Lloyd's is required to pay U.S. income tax on U.S. connected income written by Lloyd's syndicates. Lloyd's has a closing agreement with the Internal Revenue Service (IRS) whereby the amount of tax due on this business is calculated by Lloyd's and remitted directly to the IRS. These amounts are then charged to the accounts of Chubb's Corporate Members in proportion to their participation in the
relevant syndicates. Chubb's Corporate Members are subject to this arrangement but, as U.K. domiciled companies, will receive U.K. corporation tax credits for any U.S. income tax incurred up to the value of the equivalent U.K. corporation income tax charge on this income.
Chubb Group Holdings and its respective subsidiaries are subject to income taxes imposed by U.S. authorities and file a consolidated U.S. Federal income tax return. Should Chubb Group Holdings pay a dividend to Chubb Limited, withholding taxes would apply. Currently, however, no withholding taxes are accrued with respect to such un-remitted earnings as management has no intention of remitting these earnings. Similarly, no taxes have been provided on the un-remitted earnings of certain foreign subsidiaries (Chubb Life Insurance Hong Kong and Chubb Life Insurance Korea Company Ltd.) as management has no intention of remitting these earnings. Finally, we have made a partial reinvestment assertion on historical earnings for LINA Life Insurance Company of Korea and Huatai Insurance Group Co., Ltd. The cumulative amount that would be subject to withholding tax, if distributed, as well as the determination of the associated tax liability are not practicable to compute; however, such amount would be material.
Certain international operations of Chubb are also subject to income taxes imposed by the jurisdictions in which they operate. Chubb's domestic operations are in Switzerland, the jurisdiction where we are legally organized, incorporated, and registered.
The following table presents pre-tax income and the related provision for income taxes:
| Year Ended December 31 | |||||||||||||||||
| (in millions of U.S. dollars) | 2025 | 2024 | 2023 | ||||||||||||||
| Pre-tax income: | |||||||||||||||||
| Domestic | $ | 185 | $ | 121 | $ | 44 | |||||||||||
| Foreign | 12,859 | 11,334 | 9,482 | ||||||||||||||
| Total pre-tax income | $ | 13,044 | $ | 11,455 | $ | 9,526 | |||||||||||
| Provision for income taxes | |||||||||||||||||
| Current tax expense: | |||||||||||||||||
| Federal, cantonal and communal | $ | 85 | $ | 29 | $ | 25 | |||||||||||
| Foreign | 2,000 | 1,700 | 1,570 | ||||||||||||||
| Total current tax expense | 2,085 | 1,729 | 1,595 | ||||||||||||||
| Deferred tax expense (benefit): | |||||||||||||||||
| Federal, cantonal and communal | (14) | 14 | (63) | ||||||||||||||
| Foreign | 351 | 72 | (1,021) | ||||||||||||||
| Total deferred tax expense (benefit) | 337 | 86 | (1,084) | ||||||||||||||
| Provision for income taxes | $ | 2,422 | $ | 1,815 | $ | 511 | |||||||||||
The following tables present a reconciliation of the difference between the provision for income taxes and the expected tax provision at the Swiss statutory income tax rate:
Year Ended December 31, 2025 | ||||||||
| (in millions of U.S. dollars) | Amount | Percent | ||||||
Expected tax provision at Swiss statutory tax rate (1) | $ | 1,021 | 7.8 | % | ||||
| Foreign tax effects | ||||||||
| Bermuda: | ||||||||
| Statutory tax rate difference between Bermuda and Switzerland | 327 | 2.5 | % | |||||
| Tax credits: | ||||||||
| Credits for taxes paid to foreign jurisdictions | (157) | (1.2) | % | |||||
| Nontaxable or nondeductible items: | ||||||||
| Excluded dividends, gains and losses | (196) | (1.5) | % | |||||
| Other nontaxable or nondeductible items | 5 | — | ||||||
| Other | 9 | 0.1 | % | |||||
| United States: | ||||||||
| Statutory tax rate difference between United States and Switzerland | 553 | 4.2 | % | |||||
| Other | 5 | 0.1 | % | |||||
| Other foreign jurisdictions | 796 | 6.1 | % | |||||
| Other adjustments | 59 | 0.5 | % | |||||
| Provision for income taxes | $ | 2,422 | 18.6 | % | ||||
| Year Ended December 31 | |||||||||||
| (in millions of U.S. dollars) | 2024 | 2023 | |||||||||
Expected tax provision at Swiss statutory tax rate (1) | $ | 2,251 | $ | 1,872 | |||||||
| Permanent differences: | |||||||||||
| Taxes on earnings subject to rate other than Swiss statutory rate | (510) | (389) | |||||||||
| Bermuda tax law enactment | (55) | (1,135) | |||||||||
| Net withholding taxes | 145 | 15 | |||||||||
| Other | (16) | 148 | |||||||||
| Provision for income taxes | $ | 1,815 | $ | 511 | |||||||
(1)2025 reflects the Swiss federal corporate income tax at a flat rate of 8.5 percent on profit after tax, resulting in an effective rate of approximately 7.8 percent on profit before tax, with no federal corporate capital tax. 2024 and 2023 reflect the combined Swiss federal and cantonal rate.
The following table presents supplemental cash flow information on Swiss federal, cantonal and communal, and foreign income taxes paid, including jurisdictions where income taxes paid exceeded five percent of total income taxes paid (net of refunds):
| Year Ended December 31 | |||||||||||||||||
| (in millions of U.S. dollars) | 2025 | 2024 | 2023 | ||||||||||||||
| Income taxes paid: | |||||||||||||||||
| Federal, cantonal and communal | $ | 34 | |||||||||||||||
| Foreign | 2,177 | ||||||||||||||||
| Total income taxes paid (net of refunds) | $ | 2,211 | $ | 1,662 | $ | 1,465 | |||||||||||
Income taxes paid (net of refunds) in jurisdictions exceeding five percent of total: | |||||||||||||||||
| Foreign | |||||||||||||||||
| Bermuda | $ | 250 | |||||||||||||||
| Korea | 257 | ||||||||||||||||
| United Kingdom | 289 | ||||||||||||||||
| United States | 614 | ||||||||||||||||
Current income tax receivable of $419 million and $246 million at December 31, 2025 and 2024, respectively, was recorded in Other assets on the Consolidated balance sheets. Current income tax payable of $377 million and $376 million at December 31, 2025 and 2024, respectively, was recorded in Accounts payable, accrued expenses, and other liabilities on the Consolidated balance sheets.
The following table presents the components of net deferred tax assets and liabilities:
| December 31 | |||||||||||
| (in millions of U.S. dollars) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Loss reserve discount | $ | 2,073 | $ | 1,746 | |||||||
| Unearned premiums reserve | 713 | 753 | |||||||||
| Foreign tax credits | 5 | 18 | |||||||||
| Loss carry-forwards | 162 | 146 | |||||||||
Investments (1) | — | 512 | |||||||||
| Depreciation | — | 26 | |||||||||
| Future policy benefits | 103 | 176 | |||||||||
| Other | 498 | 268 | |||||||||
| Total deferred tax assets | 3,554 | 3,645 | |||||||||
| Valuation allowance | 637 | 1,081 | |||||||||
| Deferred tax assets, net of valuation allowance | 2,917 | 2,564 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Deferred policy acquisition costs | 1,650 | 1,005 | |||||||||
| Other intangible assets, including VOBA | 1,154 | 1,289 | |||||||||
Investments (1) | 127 | — | |||||||||
| Depreciation | 112 | — | |||||||||
| Un-remitted foreign earnings | 303 | 251 | |||||||||
| Total deferred tax liabilities | 3,346 | 2,545 | |||||||||
| Net deferred tax assets (liabilities) | $ | (429) | $ | 19 | |||||||
(1)Included in Investments are deferred tax assets on unrealized depreciation of $234 million and $787 million at December 31, 2025 and 2024, respectively.
The valuation allowance of $637 million and $1,081 million at December 31, 2025 and 2024, respectively, reflects management's assessment, based on available information, that it is more likely than not that a portion of the deferred tax assets will not be realized due to the inability of certain subsidiaries to generate sufficient taxable income. Adjustments to the valuation allowance are made when there is a change in management's assessment of the amount of deferred tax assets that are realizable.
For the year ended December 31, 2025, the tax benefit on certain unrealized capital losses in our investment portfolio was reduced by a valuation allowance of $179 million necessary due to limitations on the utilization of these losses for tax purposes. As part of evaluating whether it was more likely than not that we could record a tax benefit on these losses, we considered realized gains, carryback capacity and available tax planning strategies.
At December 31, 2025, Chubb has net operating loss carry-forwards of $579 million which, if unused, will expire starting in 2026, and a U.S. capital loss carry-forward of $52 million which, if unused, will expire starting in 2028.
The following table presents a reconciliation of the beginning and ending amount of gross unrecognized tax benefits:
| Year Ended December 31 | |||||||||||
| (in millions of U.S. dollars) | 2025 | 2024 | |||||||||
| Balance, beginning of year | $ | 130 | $ | 73 | |||||||
| Additions based on tax positions related to the current year | 5 | 1 | |||||||||
| Additions based on tax positions related to prior years | 20 | 58 | |||||||||
| Reductions based on tax positions related to prior years | (26) | (1) | |||||||||
| Reductions for the lapse of the applicable statutes of limitations | — | (1) | |||||||||
| Reductions for settlements with taxing authorities | (50) | — | |||||||||
| Balance, end of year | $ | 79 | $ | 130 | |||||||
At December 31, 2025 and 2024, the gross unrecognized tax benefits of $79 million and $130 million, respectively, can be reduced by $5 million and $18 million, respectively, associated with foreign tax credits. The net amounts of $74 million and $112 million at December 31, 2025 and 2024, respectively, if recognized, would favorably affect the effective tax rate.
Chubb recognizes accruals for interest income, expense and penalties, if any, related to tax refunds and unrecognized tax benefits, respectively, in Income tax expense in the Consolidated statements of operations. Tax-related net interest (income) expense and penalties reported in the Consolidated statements of operations were $(23) million, $6 million, and $7 million at December 31, 2025, 2024, and 2023, respectively. Liabilities for tax-related interest and penalties in our Consolidated balance sheets were $24 million and $30 million at December 31, 2025 and 2024, respectively.
The IRS is in the process of finalizing its examination of Chubb Group Holdings' tax returns for years 2014 through 2017. No material adjustments have been proposed related to these years. The tax return for 2018 remains under examination by the IRS.
In January 2026, the IRS commenced its examination of Chubb Group Holdings’ tax returns for years 2019 through 2023. As a multinational company, we also have examinations under way in various US states and non-US jurisdictions. With few exceptions, Chubb is no longer subject to income tax examinations for years prior to 2014.
The following table summarizes tax years open for examination by major income tax jurisdiction:
| At December 31, 2025 | |||||||||||
| Australia | 2019 | - | 2025 | ||||||||
| Brazil | 2019 | - | 2025 | ||||||||
| Canada | 2018 | - | 2025 | ||||||||
| China | 2022 | - | 2025 | ||||||||
| France | 2023 | - | 2025 | ||||||||
| Germany | 2016 | - | 2025 | ||||||||
| Italy | 2020 | - | 2025 | ||||||||
| Korea | 2020 | - | 2025 | ||||||||
| Mexico | 2016 | - | 2025 | ||||||||
| Spain | 2012 | - | 2025 | ||||||||
| Switzerland | 2022 | - | 2025 | ||||||||
| United Kingdom | 2015 | - | 2025 | ||||||||
| United States | 2014 | - | 2025 | ||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 23, 2024 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.