The operator introduces the Chubb Limited First Quarter 2024 Earnings Call and turns it over to Karen Beyer, Senior Vice President of Investor Relations. Beyer introduces the speakers, including Chairman and CEO Evan Greenberg and CFO Peter Enns. Greenberg discusses the company's strong start to the year, with double digit growth in core operating income driven by all three sources of income: P&C underwriting, investment, and life insurance.

The company experienced strong growth in premium revenue, with double digit growth in both commercial and consumer P&C and international life businesses. Core operating income and EPS also saw significant increases. P&C underwriting income and investment income were up, and the company's liquidity and investment income are expected to continue growing. Life segment income also saw growth, with a strong return on equity. Net premiums increased globally, with balanced growth in both commercial and consumer areas. The company's growth was also partially attributed to its acquisition of Huatai.

The commercial property and casualty rate environment was favorable, with overall conditions exceeding loss costs and rate decreases in financial lines slowing. North America saw a 10% increase in premiums, driven by personal and commercial insurance. Excluding the impact of a large structured transaction and corrective underwriting actions, the P&C growth normalized at a strong 11.6%. Record new business and strong renewal retention indicate a positive market tone and excellent operating performance. Premiums in the major accounts and specialty division increased by 12%, with the middle market division seeing a 7% increase. Pricing increased by 12.8%, with the best rates seen in the last four to five quarters.

The company experienced strong pricing and rate increases in their North America business for property and casualty, with property pricing up 13% and casualty pricing up 13.1%. Workers comp pricing was up 4.8% and loss costs were stable. Financial lines saw a decline in rates, but the company is prioritizing underwriting margin and income. The high net worth personal lines business had a successful quarter with premium growth of over 12%, and the homeowner's business achieved pricing of 17% with steady loss cost trends.

The agriculture business had a good quarter due to better than expected crop results. The international general insurance operations saw a 17.5% increase in net premiums, with all major regions contributing to the growth. Retail property and casualty lines saw a 5.5% increase in pricing, while financial lines saw a decrease of 2.3%. The international consumer P&C business had a 47% growth in personal lines, led by Asia and Latin America. The consolidation of the China business contributed to a modest increase in the overseas general's combined ratio. The international life insurance business saw a 50% increase in premiums and deposits, with strong growth in Taiwan, Hong Kong, China, and Korea. Global Re also had a strong quarter with a 30% increase in premiums and a combined ratio of 76.9%.

The company had a successful quarter, with strong growth in top line and earnings per share. They ended the quarter in a strong financial position, with record high book value and cash and invested assets. There were two one-time earnings items, including a deferred tax benefit and a contribution to the Chubb Charitable Foundation. They also issued new debt and increased their ownership in Huatai.

In the last quarter, Huatai shares were almost completely closed. Book and tangible book value per share increased due to strong results, but dividends and share repurchases offset some of the gains. The A-rated portfolio had a net investment income of $1.48 billion, slightly beating expectations. Underwriting results included $435 million in catastrophe losses and $216 million in favorable prior period development. The reported tax rate was 15.2%, but is expected to be higher for the full year. The call is now open for questions.

During the earnings call, Evan Greenberg addressed a question from David Motemaden regarding the $95 million of unfavorable reserve development on long tail lines. Greenberg explained that this was spread out over multiple periods and was mainly due to large commercial fleets and trucking companies. He also mentioned that they had been taking underwriting actions to address this issue and that the development was not a surprise as they continually track actual versus expected activity. Greenberg emphasized that their reserves are strong.

During a recent earnings call, the CEO of a major insurance company discussed the growth and rate increases in their commercial casualty business. He emphasized that the company is achieving rate increases that exceed loss cost and maintain adequacy in their book. They are also able to grow the business in stressed classes where rate increases are necessary to hit their target combined ratios. The CEO also mentioned that they are actively working to address the issue of social inflation through risk selection and pricing strategies.

Greenberg explains that the insurance industry reflects the reality of the current environment, including any potential actions to reduce inflation. However, he notes that tort reform is a long-term and ongoing process that will likely be tackled on a state-by-state basis. He also mentions the role of litigation finance and the need for changes in disclosure laws and liability laws.

The speaker discusses how the trial bar targets cases and companies, and how the insurance industry is not sympathetic. They also mention that personal lines have seen double-digit lost cost inflation, which is attributed to frequency of loss, weather-related events, wage inflation, and materials. The speaker notes that their company ensures more affluent individuals with a richer product that duplicates what was lost, leading to inherent inflation.

The speaker addresses the potential for inflation in their industry and mentions that they have stayed on top of pricing and coverage for clients. They also mention the growth in their reinsurance lines, but clarify that it is off of a relatively small base. They attribute this growth to favorable market conditions and increased allocation of CAT capacity. The speaker then responds to a question about M&A, stating that they have featured it but do not provide further details.

Evan Greenberg, CEO of Chubb Limited, discussed the 1-2 points of drag on holding excess capital in his shareholder letter. He mentioned that the company is generating great results and has excess capital for both risk and opportunity. However, he cautioned against expecting the company to become more active in the market, as they are a global company with a lot of opportunities and their eyes are always open. He also stated that the financial lines business is behaving differently in major accounts versus middle market, and there are certain cohorts where market competition is irrational.

The speaker discusses the behavior of various cohorts in the publicly traded D&O and not-for-profit D&O markets, as well as the irrationality and naivety of some players in the employment practices liability market. They also mention the impact of legal changes at the federal level on financial lines. The speaker emphasizes the importance of claims-made policies in revealing the true state of a company's business. The speaker then shifts to discussing priorities in US personal lines, specifically mentioning California and the focus on risk selection and growth. They note that the current underwriting earnings in this market are well underwritten.

Evan Greenberg, CEO of an insurance company, discusses the key priorities for managing their business. These include pushing the envelope in terms of services and coverage, using technology to improve rates and claims management, and managing CAT exposure for clients. The company is also focused on improving risk rating and pricing, and expanding coverage in areas such as flood.

Brian Meredith thanks Evan for the opportunity to ask a question and asks about the increase in net written premiums in North America commercial. Evan defers to John Lupica, who explains that the increase is due to a large structure transaction and exiting two MGAs. Evan also mentions that the net to gross ratio is virtually identical when these adjustments are made. Brian also asks for the total North America commercial pricing rate and trend, which Evan had previously provided as 12.8% increase in pricing, including a 9% rate increase and a 3.1% exposure change. Loss costs are trending at 6.8%, with short tail at 5.3% and long tail at 7.6%.

The speaker responds to a question about the company's underwriting discipline and growth, pointing out that they have a strong track record of shrinking unprofitable lines and then growing them again. They also mention that their combined ratio and net investment income have both improved.

The speaker is asked about when the market will reach a point where rates and loss trends are at similar levels, and they respond that it is difficult to predict as the market is always messy and inherently unpredictable. They also mention that data and analytics can help make cycles less volatile in some areas, but not in others where the loss cost environment is more specific. The next question is about the speaker's comments on "dumb behavior" in financial lines.

During a recent conference call, Evan Greenberg was asked about the undisciplined behavior in the market and who is driving it. He declined to comment on this. When asked about casualty reserves, Greenberg stated that the trend in loss costs did not change during COVID, but the reporting pattern did. He also mentioned that the post-COVID pattern is in line with their expectations. The question of changes in tax rates for next year was directed to Peter Enns, who stated that it is too early to tell due to the various changes happening in different countries.

Evan Greenberg, CEO of Chubb, discussed the company's recent growth and stated that a large loss, such as the Baltimore bridge accident, is within their expected exposure. He also mentioned that premium growth in property and casualty was driven by rate and price increases, with a substantial contribution from new business. Greenberg also noted that there is planned re-underwriting in their North America Commercial division.

The speaker declines to provide guidance on growth for the year, but mentions a previous quarter's growth rate and states that it is not indicative of the year's growth. They also mention a one-time underwriting action and emphasize that their business is diversified, so they do not provide yearly growth guidance. The speaker thanks the participants and ends the call.

This summary was generated with AI and may contain some inaccuracies.