Chubb CEO condemns brokers' 'abusive' behaviour

The CEO of property/casualty insurer Chubb has criticised the "abusive behaviour" on the part of some brokers when addressing shareholders in the 2016 annual report.

Evan Greenberg sees "abusive behaviour on the part of some brokers who enrich themselves at the expense of both their customers and underwriters. Cloaked in the mantra of ‘customer best interest’ or ‘treating customers fairly,’ they seek the cheapest price and broadest coverage at commission terms that by any measure are excessive. Forcing underwriters to succumb to the lowest common denominator is hardly in the customer’s, or industry’s, best interest."

Greenberg called this behaviour of brokers as a reaction to the soft market. Re/insurance rates are under pressure because of excess capacity. Greenberg believes that the brokers’ behaviour is not sustainable and he warned that it may result in brokers losing business eventually.

"These predatory behaviours, which have shown up around the world, and in London in particular, are simply unsustainable from an underwriting perspective and will come back to haunt these brokers: there will be customer and regulator backlash, or worse. Remember, distribution can be disintermediated."

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