Global re/insurer Chubb is “leaning into” the reinsurance business opportunity as rates firm, according to its CEO Evan Greenberg.
In the current hardening market environment global players like Chubb are upsizing on their reinsurance underwriting portfolios to capitalise on improved and more risk-adequate rates.
Speaking during his firms second-quarter earnings call recently, Evan Greenberg, CEO of Chubb, explained how the market looks more attractive right now.
“We are more active in our reinsurance business, it is a greater growth area for Chubb now,” Greenberg said.
He added, “We have, like our E&S business and particularly in London where we have been disciplined, shrunk for a number of years because we weren’t getting paid to take the risk.
“We are getting paid more adequately to take risk in a number of classes now and that is growing by the quarter.”
Reinsurance is underwritten through the Chubb Tempest Re brand out of global market locations including London and Bermuda.
It looks set to be an increasingly important piece of the business mix for globally diversified re/insurance players like Chubb, for who reinsurance has been less attractive in recent years.
Greenberg said, “Therefore, we’re leaning into that and our reinsurance business, from what we can tell today, will continue to expand as we go forward.”
Of course, for a company the size of Chubb there are two sides to reinsurance, as it underwrites it but also utilises it to manage its broader exposures.
With rates rising Chubb will also be paying more on the reinsurance it procures.
Greenberg explained, “We buy reinsurance fundamentally to be able to provide limits of liability beyond what we’re what we want to expose our balance sheet to. We buy it for protection of volatility where it makes sense.
“So we do it for fundamental business purposes and we buy reinsurance in a manner where we measure the risk/reward and the proper risk-adjusted pricing. That’s what we’re willing to pay for protection.”