Rate increase slows down for Chubb in North America
In North America, rates overall were up about 2.5 percent for Chubb in the third quarter of 2018, down from last quarter's 3 percent, CEO Evan Greenberg said during the insurer’s results conference call.
“The difference was almost entirely a result of mix of business,” Greenberg said.
Pricing in the US in particular was not keeping pace with loss cost trends in a number of important longer tail classes, Greenberg said. “All things being equal, this puts pressure on margins and serves as a natural governor on growth,” Greenberg said.
For Chubb, this pressure is ameliorated to some degree in those lines by its ongoing underwriting portfolio actions and, overall, by the company’s mix of business as it emphasizes growth in other areas.
In major accounts rates overall were up 2 percent, Greenberg noted. Middle market P&C rates, excluding workers compensation, were up 2 percent, the strongest quarter again in several years and continuing a positive trend, Greenberg said.
In the North America personal lines business, pricing was up 2.7 percent in the quarter, the strongest rate increase quarter for homeowners in a number of years, Greenberg noted.
“We are taking and will continue to take underwriting and pricing actions which, over a reasonable period of time, will bring our loss ratio back in line,” Greenberg noted.
As for pricing conditions outside the US, Greenberg said that rates in the international retail and London wholesale business overall increased in line with last quarter, up 3 percent in the retail division, and up 4 percent in Chubb’s wholesale business.
Chubb’s net profits soared in the third quarter reaching $1.2 billion in the period compared with a net loss of $70 million in the same period a year earlier, when it was hit by multiple natural catastrophes. Its combined ratio for the period was 90.9 percent compared with 110.8 percent in the same period a year earlier.
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