Chubb Announces Completion of Harbor Point Transaction
WARREN, New Jersey, December 15, 2005 – The Chubb Corporation [NYSE:CB] announced today that it has completed its previously announced strategic transaction involving
a new global reinsurance company, Harbor Point Limited.
Chubb has received from Harbor Point $200 million of 6% convertible notes and warrants, representing in the aggregate approximately
16% of the equity of the new company on a fully converted and diluted basis. Chubb expects the transaction to result in a
pre-tax gain of approximately $200 million, of which $168 million would be recognized in the fourth quarter of 2005 and $32
million would be deferred.
Under arrangements entered into with Harbor Point as part of the transaction, Chubb will also receive cash payments over the
next two years. The amounts will be based on the amount of reinsurance business placed through Chubb by Harbor Point during
this transition period and the amount of Chubb business renewed by Harbor Point. Chubb expects to recognize these amounts
in income in 2006 and 2007.
Certain statements in this release are “forward-looking statements” as that term is defined in the Private Securities Litigation
Reform Act of 1995 (PSLRA). These forward-looking statements are made pursuant to the safe harbor provisions of the PSLRA
and include statements relating to the amounts and timing of Chubb’s gain on the Harbor Point transaction and payments Chubb
expects to receive from Harbor Point. Forward-looking statements are made based upon management’s current expectations and
beliefs concerning trends and future developments and their potential effects on us. These statements are not guarantees of
future performance. Actual results may differ materially from those suggested by forward-looking statements as a result of
risks and uncertainties, which include, among others, those discussed or identified from time to time in our public filings
with the Securities and Exchange Commission and those associated with the financial performance of Harbor Point Limited and
general economic and market conditions. Chubb assumes no obligation to update any forward-looking information set forth in
this document, which speak as of the date hereof.
For further information contact:
Investors:
Glenn A. Montgomery
908-903-2365
Media:
Mark E. Greenberg
908-903-2682
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