Chubb bullish on rate reacceleration for bulk of business, expects more

Insurance rates and pricing “reaccelerated” during the first quarter with only select lines taking it the other way, a trend which should continue into the coming period, the CEO of global insurer  Chubb, Evan Greenberg (pictured), has told markets.

“Rate and price increases reaccelerated,” Greenberg told his company’s Q1 earnings call. “I expect the pattern to continue.”

Greenberg rattled off North American commercial P&C pricing gains of 11.2%, including rate gains at 6.4% and exposure growth of 4.5%. Commercial property rose 27% on 16.4% of rate and 9.1% of exposure. He cited casualty up 9.9% on 7.4% from rate and 2.3% from exposure. And he sees continuation everywhere. Global retail took an 8% [pricing boost on 4.8% of rate and about 2.9% of exposure.

“I expect the trend you see in pricing and I expect the pattern you see in growth to continue,” Greenberg said during the Q&A.

“And it’s not simply about North America … look at international P&C and I expect the pattern to continue; look to consumer lines and I expect the pattern to continue; look at life and I expect the pattern to continue.”

Financial lines and select professional liability are the outlier to the growth and rate story. “The competitive environment is aggressive and rate have continued to decline in recognition of favourable experience.” Financial lines suffered a drop in premium on an “about 2%” decline in rate.

Greenberg is a bit derisive of rivals piling into those lines, seeing “a lot of players with no data and no experience” who “don’t seem to have their eye on the ball.” Loss experience may be down of late, but the regions are “not an area that is devoid of risk” given threats of recession, market volatility, climate change and greenwashing charges. “You gotta be a little cautious.”

Chubb prefers to attack the opportunity from the side of the primary market, rather than reinsurance.

“Those are areas in which we are taking more exposure,” Greenberg said of Chubb’s operations not only in catastrophe reinsurance, but excess property and property share. “But overwhelmingly when we look at the market and risk-reward, we are more primary oriented.”

The upshot for Chubb will be continued premium growth, likely in excess of an adjusted NPW growth rate seen in Q1 at 7.6% for North American business excluding the explosion in agriculture and the impact of loss portfolio transfer. That figure blends 10% growth across the bulk of the business against decline in the financial and professional lines. Greenberg declined to endorse the figure as an absolute target.

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