(Bloomberg) -- Ace Ltd. Chief Executive Officer Evan Greenbergsaid there are signs the insurance industry is entering another eraof taking on too much risk as competition pressures companies tolower prices to win business.

“It’s not back to the late ’90s that way, but we are seeing moreof the things that cause us to shake our heads,” Greenberg said ina call Wednesday. “People have been really hungry, but we’re notseeing the stupidity that we’ve seen in the past -- not yet.”

Property-and-casualty policy sales fell 2.9% in the firstquarter, Zurich-based Ace said in a statement after markets closedTuesday, driven partly by currency fluctuations and declines in theagriculture business. Travelers Cos., the sole P&C insurer inthe Dow Jones Industrial Average, said earlier Tuesday that policysales climbed less than one percent as the pace slowed for rateincreases to commercial clients.

Ace declined 1.1% to $107.82 at 10:31 a.m. in New York trading.Travelers slumped 0.7% to $101.03 after falling 4% Tuesday. Theyare among the largest financial companies to remain profitablethrough the credit crisis.

Greenberg and Travelers CEO Jay Fishman have said they’reprepared to walk away from business that doesn’t meet profitabilitytargets. Fishman said Tuesday on a call with investors that hewould “draw lines in the sand” to prevent underwriting policies atdangerous prices.

Rates for property-catastrophe coverage fell 11% for policiesthat renewed on Jan. 1, a major date for arranging the coverage,according to Guy Carpenter, a division of Marsh & McLennan Cos.Pensions and hedge funds have been making more weather-related betsas they seek risks that aren’t tied to stock and bond markets.

Pulling Handles

The competition has pushed traditional insurers to diversifyacross products and regions to find areas with better margins.Greenberg on Wednesday highlighted policies that guard clientsagainst cyber risks, and Ace has expanded in nations includingBrazil and Mexico through acquisitions.

“We have a lot of handles to pull and we’re pulling all that wecan that help to ameliorate the impact of pricing,” Greenberg saidon the call. “We are quite diversified by product area. A lot ofour business is not commercial P&C, and our commercial P&Cis spread very well across the globe and spread around a lot ofproducts.”

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