A.M. Best has removed from under review with negative implications and affirmed the financial strength rating of A++ (Superior) of most subsidiaries of Chubb Limited (Chubb) (formerly known as ACE Limited) (Zurich, Switzerland) [NYSE:CB], following the completion of The Chubb Corporation's merger into ACE INA Holdings Inc., which was subsequently renamed Chubb INA Holdings, Inc. A.M. Best also has removed from under review with negative implications and downgraded the issuer credit rating (ICR) to "aa+" from "aaa" of the former property/casualty subsidiaries of The Chubb Corporation. Concurrently, A.M. Best has affirmed the ICR of "aa+" of most of the remaining Chubb subsidiaries, including ACE European Group Limited (United Kingdom).

The ICRs of "a+" of Chubb Limited and Chubb INA Holdings Inc. have also been removed from under review with negative implications and affirmed, with various rating actions taken on the issue ratings. The outlook assigned to each of the ratings is stable. Please see the link below for a detailed listing of the companies and ratings.

The ratings were placed under review in July 2015 following the announcement that ACE Limited was acquiring The Chubb Corporation. Upon approval of the transaction, The Chubb Corporation was merged into ACE INA Holdings Inc., which remained as the surviving entity and assumed the former's debt. ACE INA Holdings Inc. was subsequently renamed Chubb INA Holdings Inc.

The rating actions follow the close of the transaction and the completion of A.M. Best's review of the ongoing integration plans and the financial positions of Chubb and its subsidiaries. Chubb maintains a strong global capital position and proven financial flexibility. The transaction was funded through internal resources, equity issue and debt proceeds. Given the increase in debt, level of tangible capital and resulting goodwill, Chubb's risk-adjusted capitalization is somewhat diminished, although it remains supportive of the operations. Financial leverage, although high, is within guidelines for the ratings and provides capital support. Chubb also maintains favorable interest coverage.

The new Chubb organization's ratings recognize the group's comprehensive and proactive enterprise risk management, disciplined underwriting, global franchise recognition, strong risk-adjusted capitalization, profitable underwriting history, ingrained underwriting culture and capability, and experienced management team. The combined organization is expected to maintain the successful operating strategies of the legacy companies, which include consistent focus on underwriting profitability through careful risk selection and pricing, appropriate policy limits within the business model framework, and the use of reinsurance to manage net retained exposures at a level appropriate for the group's risk appetite. The group's strong enterprise risk management program is demonstrated by its ability to generate favorable income levels under challenging underwriting and investment conditions and should ultimately enable the group to successfully integrate its operations.

Chubb Limited has historically maintained substantial capital levels in its Bermuda subsidiaries, which has benefited the group's balance sheet and provided rating enhancement to a number of Chubb affiliates through internal reinsurance arrangements. A.M. Best expects that the group's capital position, while diminished given the dividends paid to fund the transaction, will improve over time on the expectation of favorable underwriting and operating performance.

These positive rating factors are partially offset by increased financial leverage at its ultimate holding company, a reduction in the group's risk-adjusted capital levels and the distraction a transaction of this size should reasonably be expected to cause. Additionally, competitive market conditions persist in the group's main business segments. The group is also exposed to natural and man-made catastrophe losses, asbestos and environmental (A&E) liabilities and at least in the short term, higher risk investments. However, all financial measures currently support the current ratings, as does A.M. Best's analysis of projected performance and capital levels. A.M. Best will continue to meet with the company periodically to discuss integration plans and monitor the operating performance and related integration success.

The ratings of Chubb Seguros Panama S.A. remain under review, pending meetings with management.

The outlooks reflect A.M. Best's view that the company remains on track to successfully complete the integration of the organizations in accordance with management's plans, and is well-positioned to compete in a strained pricing environment. Factors that could lead to negative rating actions include a deterioration in the group's risk-adjusted capitalization as a result of dividend demands to service holding company needs which fall to a level that no longer supports the current ratings; an increase in Chubb's financial leverage beyond expectations; and execution risk associated with integration of entities and operations of all the Chubb companies.

For a complete listing of Chubb's FSRs, ICRs and issue ratings, please visit Chubb Limited.

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best's Recent Rating Activity web page.

A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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