(Bloomberg) -- Evan Greenberg, who built oneof the world’s largest insurers by combining Ace Ltd. and ChubbCorp. this year, sought to portray the merged companyas a more stable alternative than hobbled rivals who are seeking torebound.
|“When there’s a wounded animal loose, be careful, stay out ofthe way,” Greenberg said Thursday on a conference call discussingfirst-quarter results, when asked by Barclays Plc analyst Jay Gelbabout the competition for market share among commercialinsurers.
|Zurich Insurance Group AG andNew York-based American International Group Inc. are among insurersthat have reshaped underwriting leadership in recent quarters afterbeing burned by higher-than-expected claims costs. Shares of Zurichand AIG have each dropped about 12% since Dec. 31, compared withthe 4.3% year-to-date gain at Greenberg’s ChubbLtd. as of 10:47 a.m. in New York.
|Greenberg, a former executive at AIG, didn’t name the rivals hewas thinking about. He has said he’s prepared to sacrifice premiumrevenue to competitors who are willing to settle for lower marginsto win business. Still, disruption in the market could favor hisZurich-based company in the long run, he said.
|Double-edged sword
“It’s a double-edged sword, and you’ve got to be careful,”Greenberg said. “We’re in a market where it’s competitive, and somethings are being sold at prices that are below costs we think arereasonable. On the other hand, there is this pull and desire forstability and certainty, and familiarity, and that is drawing moretoward us.”
Greenberg on Wednesday posted first-quarter net income of $439million. That compares with a $183 million loss at AIG,which was hurt by the poor performance of hedge fund investments.Zurich is scheduled to report results next week.
|“We represent a very attractive market, and alternative, forlarge accounts seeking a deep balance sheet, great underwritingexpertise,” Greenberg said.
|Greenberg expects to cut $750 million in annual expenses by 2018due to the takeover, which is $100 million more than the originalplan, according to a statement Wednesday. Chubb also expects toboost investment income by as much as $120 million annually.
|Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.
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