CB - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to Chubb Limited Second Quarter 2018 Earnings Conference Call. Today's call is being recorded.

For opening remarks and introduction, I would like to turn the call over to Helen Wilson, Investor Relations. Please go ahead.

Helen Wilson

Thank you, and welcome to our June 30, 2018 second quarter earnings conference call.

market contain growth, including digital and pricing initiatives economic will company's relating and uncertainties. today which and and of performance and and report forward-looking to statements statements, to distribution are Our subject all risks conditions, business mix, Actual materially. differ may results Please see affect information more earnings on that could SEC recent matters. press supplement, financial for and our at available are investors.chubb.com, most these which on filings, release our website factors

which earnings of the to details non-GAAP and financial comparable will measures most financial We refer GAAP Reconciliations direct also today are measures. provided press supplement. to and related in our release

like to I'd Now, our introduce speakers.

with and Bancroft, questions your to several we call Evan Officer. pleasure assist members take Financial are First, Evan. team. management the of turn my Officer; over Also followed we'll it's Chief to our Greenberg, And us Chief to by now, Phil Chairman with Then, have our questions. Executive your

Evan G. Greenberg

core very Good of morning. year. a share, had prior $X.XX Chubb quarter good operating over from per income up X% with second

income combined, rates a driven growth year excellent. property flat. Both P&C accident about by combined revenue our results. of underwriting from to casualty produced At contributions investment XX.X% and releases. We excellent reserve our CAT from CATs, million current Year-over-year P&C growth a same and of in lines. important benefited were XX.X% results, related of ratio $XXX prior-year current accident losses positive underwriting year premium initiatives. excluding the time, were and emerging firm our were with of strong number number contributions globally of results from product continued and Our

a were income per in cash million interest and strong $XXX Book up exchange. flat mark impacted the foreign rates of back quarter, share in and from was the of by tangible the net rise X%. flow, investment book essentially On

four-year on hold back period, investor, us over which, a will the a of Excluding given and approximately to were about X% tangible rate mark up we're amortize eventually the X.X% impact book interest and buy and respectively.

second the and was investment have development. income, to Our more annualized value, CATs say Phil will quarter X.X%. prior-period in operating core about ROE book

growth X.X% capabilities the the with having benefit. quarter. territories the as market America, Chubb the Agriculture, growth wrote created P&C foreign today's the overall, for or this pricing possible I a growth-related the last quarter, X% up our outside was growth on. only revenue versus certain for conditions, A X.X% in rates I quarter. fourth Turning by we And Commercial overall quarter X.X% U.S. and U.S. bit business and excluding X.X initiatives to exchange In the company of in net because number X% that in were a improve are contributed to will P&C example, to for North of point elaborate go continued premium for

the direction outstanding. our quarters momentum several price continued. that simply At of were time, seeing firming for same retention So, rates in now renewal we've the been

the franchise, retail X%. major compelling In Chubb. America by wholesale our personal measured fact, and the across over up division, renewal were and premium, XX%, P&C retention, of nature and U.S. entire our commercial North almost was E&S premiums account quality recognition as of In

here, X%. are merger-related concentrated Excluding net which were actions premiums underwriting up

now merger-related already have mostly approximately and XX% last I As occurred. noted quarter, are $XXX the over actions million, behind of us,

was the quarter was accounts, up new XX%, major For our in business XX%. over while renewal retention

rates fourth professional up about rates both lines That you were in while up were U.S.-exposed casualty, business overall so movement we in quarter major account of major rate in give X% to X.X% quarter and in X%, wrote, accounts primary for X.X%. some quarter. general X% during major up in D&O examples me Let and for the Again, rates up Rates risk were accounts. direction. X.X%, the and up in specialty right approximately its management compares moving the first XX.X%. the up the were Property and with were primary Casualty for rates excess casualty X%. first

U.S. areas lines of financial The of perspective, we of and well, namely, the liability quite have well. XX% total overall or book, classes public stressed of runs which which our are institutions. require represents XX% book, that been actions, areas balance, runs certain professional For certain corrective professional taking, and those for D&O

were a where seen market was added additional X.X%. and retention from X.X%. Now, business revenue premium premiums to middle and North and market XXXX. revenue best about renewal Middle early X%, growth our from almost flat. growth place rates quarter. an while P&C XX%, premium Comp grew let's In about X.X market market X in turn growth, middle we've this put excluding about up were up the business, was about was business up X up X.X%. were XX%, prior new and about package commercial, net comp, were a small middle merger. points. rates new full than Casualty-related of American growth commercial exposure since points up Overall were rates was points, small up X.X%, Property X.X%, down while the In overall, quarter comp-related since initiatives better business exposure came the rates

we business in relatively base. XX%. Based were Net over up D&O premiums with million D&O professional for lines comp, Middle the strongest market were premium. impact quarter, the with years, commercial a were comp of X%. a quarters, our accelerate business and small several the this rates velocity market on to in an of in the the X.X% over middle over market, in have up middle last expect growth from year-end achieved rate the few to continued we public annual in essentially Growth positive In up the private So, albeit trend. $XXX run flat. exception up net small by rates was quarter, not-for-profit U.S. continuing have

importantly, range. quarter. five X.X% up was wasn't next North our Retention in business, to lines be accounting In remained at it strong should for if today's policy closer growth three X%. an you it Adjusting Chubb. very revenue, be seeing in that the Over to for the net multi-billion were over personal action, years, premiums wouldn't the XX%. America And dollar

of and mass the in worth given to better secure business with customers towards personal lines of net as continued and a affluent business target mix our the or high our new We renewals is opposed skewing coverage services. to customer, affluent, richness which true

to in investing business. are service customer digitally the this We enable experience

tracks notifications of variety such approaching of a cards; their can ID function advantage app take months and as Wheel teens including this our hurricanes, prevention services, and weather alert will For and introduced to mobile example, so of every an app clients, exciting the gives innovative that particularly become and wildfires we them driver introducing digitized Chubb over events clients at to insurance contact a helps agent; better, and behavior defense access services; to even that time. few functionality safer more the drivers. be the they that ability additional We're

market territories, our lines with to who Another customers is dimension we by penetrating digital underserviced personal are target marketing where carriers. mass grow business underrepresented are our by

marketplace. leads brokers attract in We agents investing and service marketing to the company with capabilities. and to independent are prospects their improve to have business good to initiatives Chubb distinguish help the their examples These and itself all digital them build underway of to

for international X% our business XX.X% up premiums Turning in insurance net overseas to constant general our retail were written operations, dollars. or

I rate goes our to the along. quarter, is growth continue year U.S. As and the mentioned do last as outside should increasing, so

was momentum. focus in net hold being were business, in capabilities given Net continue over industry the grew in in grow Asia UK/Ireland is XX% the Asia for Latin beginning grew to over X% driven and Growth, where a up contributing this to on that's middle key regions distribution Latin X% in another flat. small our is premiums strengths take commercial quarter, particular, by a today, which the up together to should to business and business, and us, the quarter. America in International is America, for gain Expanded growth market in dollars, growth a that Pac, the brought international our Pacific and Continent performance both standout quarter by about complementary Asia while constant while personal expertise Latin XX% premiums now XX%. driven and and growth are foreign just the constant X.X% in product, in a were initiative, lines the with of exchange our capabilities driven America premiums we dollar in was some XX% which $XXX of up international by X%, with was million. really base technology A&H X%, up XX%, major

encompasses broad due distribute, through institution XXX,XXX this during capabilities, on Citibanamex, of The in important of customers, variety consideration quarter, an we announced a long-term us. in growing Chubb's variety XX X,XXX partnership for Latin together, distribution enterprises. possible exclusive customers we a P&C which to personal agreement, insurance and will and America, marketing were leading a because of coverages and products the the to example of Citi a basis, agreement small branches Under agreement direct of non-life commercial individual Mexico. is bank's financial their our This business diligence million Speaking another in for an their a medium key with made of digital digital channels. long-term

within by wholesale international As rates Overall constant region. X%, rates for varied lines were net X.X% X%, business nearly in excellent marine in up pricing country our up our conditions In financial X% quarter outside global total, A&H line property had region, London the and by premiums casualty U.S., up and an retail and and up X%, flat. with or dollars. and businesses

premium many the to about North so business, net risk-adjusted contribution number adequate are market our and an to A&H closing, and John that but our grew Clancy revenue were that been pricing international that Juan Krump, capabilities, Ed X.X% earnings around grew in including XX% premiums and rate improved in was $XX I provide quarter, of continuing organization the color change international are deposits created Keogh, quarter to and which complementary In momentum an insurance Asia-focused we businesses the in the for growth life can mentioned, world. conditions we're in of wouldn't in of America. which a Andrade rate have on positive with million. we many addition in importantly, strong businesses, about net return. trends. Meanwhile, important, current just In possible, achieving XXX% is achieve from Paul up so of premiums Several further

signing our about The Chubb many scale have Lastly, optimistic our customer digital is efforts, agreements to capabilities and level. perform reimagining to from digital steady running investment, our making high the and all of of Phil. experience. I'll to product continue and service corners call including advancing substantial distribution progress to of made customer ability organization a that, major level digitally capabilities We're enhancing to and our With sum, are in turn the on we're at the In the world. over cylinders, possible.

Philip V. Bancroft

Thank you, Evan.

sheet we in Among $XXX totaling shareholders, $X.XX the remains share balance returned capital repurchased an million July in repurchases. Through overall cash of of quarter quarter, very dividends flow $XXX price was million to Our strong, capital-related Operating including $XXX and billion. and $XXX strong, in with average have $XXX per million position share. million total we financial $XX the in about at billion. the actions XX,

income billion higher redeemed investment senior for distributions. private of debt due $XXX in repaid million, and of the quarter During above equity expected also that was April, securities we we our the $X million the matured May. to range in $XXX quarter, Net slightly hybrid

and value on Our million trend the was remains upward the essentially share share an in value unchanged per million tangible rate year interest as the $XXX to were of $XXX losses expected X.X% negatively exchange caused by book the foreign rising portfolio losses in with rates. investment income Book investment by quarterly run per quarter. increased impacted Both continues. and range unrealized

$XXX adverse negative net tangible a book million losses Foreign million book after-tax weather-related of lines, value. development million by tail line negative was favorable in or XX% related expected and long from XX% of the the pre-tax in favorable after a were runoff foreign on tax. offset included period and of approximately unrealized casualty We on from from and CAT Realized pre-tax and $XXX XX% was split Pre-tax Adjusting quarter, was which tail the for included portfolio the $XXX catastrophe adjusting after loss exchange and development were development our ratio $XXX XXXX of million development, prior years, $XX after-tax million million million prior XXXX exchange. The agriculture, for losses the events, related our and This with the XX%. $XXX investment in CAT value to quarter for short lines, another quarter. U.S. principally to The had events. impact $XXX quarter accident impact were million was on reserves non-A&E about the million ratio exposures, corporate. in paid-to-incurred level for Net million increased in tax. quarter. PPD, had pre-tax $XXX $XXX are principally which positive losses million, with the for $XX $XXX

Our loss P&C to the expense decreased increased certain current a increased X year in America CATs, XX due our XX.X%, ratio point in the points combined excluding large business, transactions which basis accident basis structured commercial XX part and in North year-over-year percentage insurance ratio, increase ratio points. to

quarter for rate tax was Our XX.X%. core effective operating the

range losses of reflects prior variability development period As XX% a the and occurs. XX% our to catastrophe reminder, where annual

tax We XX% our XX%. to over in the the to of continue expect to to I'll annual call range Helen. rate turn be back effective

Helen Wilson

Thank we'll your happy you. to At take this questions. be point,

Operator

Thank you.

question Pan first today Our Please go Stanley. comes ahead. from of Morgan Kai

Kai Pan

and Thank you good very much, morning.

on U.S. professional following number my if first correct, about overall question the in professional is the lines, have surety. – up XX% premiums So, on you just

impact said math just correct. loss action I how them? probably distressed in as about to XX% if overall inflation impact mitigate social portfolio. taking areas, as wonder You you in turmoil, rising that of X% the only your than PEG, is its feel less you're so your overall the well rising do is And

Evan G. Greenberg

of first within we I mixing you professional and going surety, some businesses really said which And it about cyber what surety made And sure about question I it lines surety. – around and we're I claims we the what mentioned professional don't making way, up conflating the you're and talked substantially because made thought I surety, have us this issues D&O profession E&O, book was so got – that's not Kai, to have when so of – all Yeah, together, – hear the it it, quite and liability that I'm you public point all, everything and the – of our all math, D&O. other there, D&O about I up other is D&O, one, business. to By by separate the and to of of lot was a for all lines, so, put part of to our said we're offline. important line is professional When made that from was comes is everyone XX% number it take know the in a made our for claims perspective lines professional more talking whole way, lines. liability that, the than is

of environmental number in liability have and well We other lines a there. within as go there,

reflect we to question, trying really our to perspective. book, our we So, as On I that and loss your the they ratios was loss that create PEGs environment see be. the and select, we environment

around reflected environment which the book. an loss in to me, is right in you're all is interesting we euphemism PEGs in of are calling there have trends and that the that now the ratios that we So, what inflation, loss if social

actions been continue, that taking that business, as around been for underwriting some period. as have relate time have portfolio Our management they well within underway pricing and that we

Kai Pan

a as like combined Okay. you That's the merger, professional U.S. to lines great. XX% referring was slide I premium. surety a deck, in overall

lines. So, trying That's to down the exactly point you break what U.S. make. was didn't is professional I

Evan G. Greenberg

not our professional is lines Surety within number.

Kai Pan

be Then, I about ratio from America coming will you was the underlying is the for more impact three about the little those what sustainable like rest basis hoping combined also XX what's large are bit year-over-year structured a basis other And in quarters. North next losses, point deterioration, question those, or my Okay. non-CAT can transactions. basis commercial those the XX Great. behind XXX Are and factors? explain increase P&C, on second points points those?

Evan G. Greenberg

is, that all, combined the simply to have rate know just cost me I a part minute. about that. ratio the know same we and let of it's – at Well, first trends are, of you what a time, mean, points environment the the XX – world-class, run take and then what sense that first, I talk you basis is The you And outstanding. loss want

combined in just more do so to work you're our around to look math X.X% within in you that I when is everybody. your – at has, one-off to them, risk these premiums, persistency, lose it's and write ratio about And every change, cost that me it's We risk it largest modest where our it win in On the – When interesting and these self-funded to rise. again. and best corporations accounts, good, renew it. an By excess that. elements hand, business. keep their signature nature, By you of core in services areas extremely have, has major that, pretty Part not loss is nature, getting let have We we're We're We're that straight with and just you Think raise services a which transaction, given loss periodically so for large that other areas the where quickly self-insure also mix put around healthy, we quarter. always It's think are transfer loss perspective and have it – and level to casualty and ratios the years. its coverages, continues all management of of underwriting, it some, about the portions. and to like to provide rate margins management a I accounts especially trends accounts a had at which for transactions. this the large provider the and we major substantial ratio mitigate accounts comes growing our now business part good this risk it's it large of and franchise. large but It's complex many business. some its one lumpiness. and large of the business comp been a have accounts also exposures. But have

quarters, others. Some than they're bigger

because mentioned This telling way, impact by for that's purpose quarter, expense normally and ratio and the the what we simply of And, write, we we loss we it part because wrote wouldn't disclosed Otherwise, we more have what the larger a and of on do period. the of you only quarter. it, than usual disclosed. in ratio transaction, it's

Kai Pan

you that. for Thank Okay.

let I just want for retirement. I say Thank go, Before for your you to wishes best you. Evan

Evan G. Greenberg

Did you retirement? say best wishes for my

Helen Wilson

there Not yet.

Kai Pan

not. hope I

Evan G. Greenberg

Thank you're man. you, Kai, good a

Operator

Our today next question of comes Elyse Securities. Wells from Greenspan Fargo

Elyse B. Greenspan

morning. My first the I Good on the pricing disclosure question, appreciate environment. all Hi.

a on, As really annualize here next see started forward we momentum to the this rise, don't pricing third from we to curious year quarter, that and the continue guess think that if large just do have second in you can in rates improved levels we guys lines CAT the to momentum year, think some your for continue when start thoughts the improve quarter? in from commercial you side saw I'm of on interest and I year. addition, we to pricing

Evan G. Greenberg

the was very, Elyse, quarter. move till to begin It pricing the first fourth It quarter. in quarter. third was quarter. wasn't fourth It all, very really third didn't modest of the

So I the first I'd think that's make. point

in They of are Chubb our the portions same continue, very or think to the up where continue we're lot will those the pricing a continue also and we're the job look, The core of what who of to Understand stable is moment as pricing But lot capacity, not capacity. adequate I then, mind, cycle, way, that need going part price doing Chubb a to slightly of a much that In and push players subject speak at business, to. on to see risk good It's of the does going so should a talk, service classes is of substantial to so is adjusted business where down. aren't on for not strategy business and much of Chubb's And – about and engage And see have is rational. we pretty and Secondly, market quality. the markets we competitive, to, capabilities interesting. to I'm because about remains my which trend more we a it, always of that I return than market that that. it's in to rational commercial achieving don't cycle. with reasonable our and we insist ameliorating. achieve a

Elyse B. Greenspan

terms Paris in heard that some well. of just view as Okay. potentially on about as inflation also Thank you. leading What's And one international your we've to discussion and then, higher issues well? inflation,

Evan G. Greenberg

first a don't mean, reporting saying as are to see many, timing now right are complex tariffs already, all, to and the subject. They wow, an Well, people tariffs. of I impact have you know, interesting I an them. earnings are

to the the of and two, dollar to So actual many commerce, about, a into and imports? the being signed in and number tariffs one. large takes what's its today, And it are purchased way, meaningful the on are mostly economy and percentage. goods of relative goods. Number advance, time, not of to on It's find long relative exports of so goods, a so stream is in amount talked into size what size versus contracts is way pipeline the the

will and sake. relatively We'll going trade. see it's in the and would tariffs what if fair overall. of impact, inflation strategy balanced their is over tariffs kind aren't what part the The They're for the to of for say modest, of a leads occur, outcome simply President let's happens trade be to. should purpose more what own see that to occur So time, achieve

Elyse B. Greenspan

very Okay. Thank you much.

Evan G. Greenberg

welcome. You're

Operator

a take now go from will James. Greg question of Peters ahead. Please Raymond We

Charles Gregory Peters

little operating flow. you up And looks it for year provide we highlights like the Perhaps half of XX%. flow at cash consolidated your first you about a In if the cash was that. comments, table morning. the talked Good financial opening could look operating color more XXXX, behind

Philip V. Bancroft

tax cash underwriting payment. lower of our couple cash It's higher were operating a of but just tax had the substantially as the and a to strong cash part things. the would flow, a Yeah, flow level down period. there's from timing, I in We payments there say which were substantially, contributed of very flow

Charles Gregory Peters

table, the same XXXX. that was six XXXX months combined up Philip, for at looking ratio actually the So, versus

You underwriting the is said better?

Evan G. Greenberg

paid incurred Do up and loss not loss. mix

Philip V. Bancroft

Right.

Charles Gregory Peters

Got it.

Philip V. Bancroft

is basis. really it So, cash on a

Charles Gregory Peters

right. it, Got

Evan G. Greenberg

You can accounting. want if take into offline, that you to get

Charles Gregory Peters

that's fair. no, no, No, Yes.

you bit press both a there's digital update and are emerging last commentary. in about little could on the around distribution, your a you're release efforts how marketplace. the approaching talked if You wondering all and marketplace the give I year your an global AI. ideas And your just into these potential us in technology emerging around And that IT was what distribution budget is versus this on year coming view your ideas lot

Evan G. Greenberg

we've all capabilities, sales, go in the including enable front-end processing, of We and portion amount for – experience, platforms said things terms Well, and what experience. very go would all – billion year directly things to a legacy it's the terms externally, in new data that A I'll of of that's consumer is development, that both the development give of and scraping, and on both API cloud-enabled substantial that of in of – analytics, connecting access marketing, would in into customer anytime-anywhere into money. to the terms infrastructure, substantial a you $X IT, in spend with because technology, improving large customer new and a about publicly. and all about

for part in age, including thrives years, a is, we've predominantly. as in the is digitizing – digital and anything that We're an age, in to of has of you it this it a organization, on America, thrive global so Asia, the in we're that And period, number doing it U.S. been individual. Latin that working all the doing just digital and scale. at are We it like

are You you remain analog, history.

Charles Gregory Peters

you think Got in it. more going you to around And follow-up to guys just do in when technology's in mobile think that have I the of what terms spent mobile a going lines? Or that's you the than relevant have lines be as technology, commercial lines stuff to personal about a role business? think commercial point, do

Evan G. Greenberg

up from which and It and the of that commercial everywhere, is constituents, business IoT goods capabilities market, is about time the the – moving is building whereas your is the the is it it's will account are Well, anytime-anywhere middle servicing does commercial, micro be already revolutionized the business. it over from it commercial, in lines installed the all business small personal, and more individual into to and to that transit engineering, large important home. to to corporate, with fundamentally large

Charles Gregory Peters

Thanks the for Great. answers.

Evan G. Greenberg

welcome. You're

Operator

take Sachs. will Kinar now Yaron We ahead. a of question go Goldman Please from

Yaron Kinar

My everybody. North to commercial morning, America the business. first question Good relates

of driving rate Should far from that what you'd other Kai's we see rate year think question more coming increases I you've up. pressure these the answered the trends? are pipeline, So, the increases? that you cost about in loss you less point think factors so lost by with cost the accident ratio loss Do see achieved and being trends now offset

Evan G. Greenberg

enough vary trends. to the by lines, about And business. of it's to by it casualty-related going rate will I It's think line. of cost with is In vary pace all loss line keep some and lines, increase

in of we some portfolio manage in and those, how other to not; and help it some I areas, won't. will and underwriting balance actions think in out, it's some that

it's So combination, bag. it's a a mixed

You can't simply generalize.

Yaron Kinar

had you if a be And Okay. ball with share crystal that wanting us... you'd to

Evan G. Greenberg

No.

Yaron Kinar

Okay, okay.

professional for line a Going the to second... liability

Evan G. Greenberg

I this. wouldn't if buddy, be crystal doing I ball, had Hey, a

Yaron Kinar

this doing even enjoying be more. may you and it Well,

Evan G. Greenberg

There could be that, too.

Yaron Kinar

relatively to a decrease, same the that stay in How And you a the have over today, that based on front now. professional so compare was required to does some the corrective it the year increase data ago? second, action of you liability that or XX% for where to do said you XX% block year? next you expect of block right about that Going

Evan G. Greenberg

will to compare We And I lower. today? be Slightly – a ago And it decrease. down. how year next it expect expect year to it I

Yaron Kinar

much. very you Thank

Evan G. Greenberg

welcome. You're

Operator

of We'll from Please now take Barclays. Jay a go Gelb ahead. question

Jay Gelb

Thank you.

Evan G. Greenberg

Good morning, Jay.

Jay Gelb

Good was emerging on to hoping focus morning. of I a couple issues.

The first one record. be which seem the is worst on Japan floods, among to on the

for exposure Just and insurance what the trying there. about might to reinsurance be Chubb think

Evan G. Greenberg

with know but – it's certainty, Right a it look, be significant and don't to expect Chubb. to we don't still emerging, event we

Jay Gelb

And potentially Okay. then, tougher That's a one... helpful.

Evan G. Greenberg

relatively hearing modest. I far, what From so

Jay Gelb

I judgment exposure, whether this emerging it a the area industry, risk from coming $X of new potential and as nearly appreciate of your against be asbestos could on it talc-related that. you An mean billion Chubb. perspective like within perhaps including area for J&J few appears risk I'd think a for past weeks. asbestos what having to the

Evan G. Greenberg

Jay, were you on First, a when question, little? me did powder baby mother use you ask let your you

Philip V. Bancroft

Getting very personal here.

Evan G. Greenberg

has cohorts not every asbestos business – it a things number trend – the of had or few Look, new of years, there new – new industry, one. targets so have been in that's

at been look it manufacturers determined those – know, congoleum they made floor could have motors, was motors was you small so who and and It had made tiles. asbestos. as You who it

like up out powder me. the period think been wasn't did in this – the came long around last gets that facts this about a sides, how who read, baby There it's see has asbestos, so way, just would you This theme, right knows? big, We powder. This I And about it's and now, few emerge. as because there you by and in around. we'll for has is there's both it. science baby the months. And time. facts, headline a speculate I'm it grand is not But going the it what been what just read when not reasonably of seem, are not to So, there that see see startle

Jay Gelb

Okay.

So, sound keeping this night. something it is at like doesn't up you that's issue

Evan G. Greenberg

lot it's No. – of brain other my out crowded a crowded that's no, – – things. got I with

Jay Gelb

of of deployed if think Okay. My period excess capital, billion might how Should of up if kind we All coming final right. how Chubb of $X has billion get $X a about over quantification about opportunities capital. I'm to some think with question, I excess acquisition aren't available? soft that done time,

Evan G. Greenberg

of be have and company, There will – complement if and We're we and both that a the do in to I might at point approximately organic about you grow And quarter, brought And there would a since surplus higher think shareholders we $XXX what is have in price. opportunities. see beyond acquisitions to a shares it bought been back the then to capital and we've return board that at, feel of risk had will business. of we back have to quarter, worth we million prudent form. what some beginning the our first There for we the we price say, at are the patient, $XXX. in I are it are risk is growth organically, second

Jay Gelb

right. That's Thanks.

Evan G. Greenberg

welcome. You're

Operator

to Bank of move of Lynch. Cohen now Jay America Merrill We

Evan G. Greenberg

We to finished going think. with We're Paul Jay I just Newsome, Cohen.

Jay A. Cohen

Different Jay.

Philip V. Bancroft

Jay That Gelb. was

Evan G. Greenberg

sorry. that Oh, Jay Gelb, was

Jay A. Cohen

the worse I okay. so. That's could get be life for question had I We've confused a had confused line We time. some on earnings. – there's people top growth with,

the noticeably. This earnings quarter, pick we wondering that. saw begin to what's behind actually up really I'm pretty

Evan G. Greenberg

and that. give Phil then overarching Well, I just let on want to that, add to an

nature, and business, that of And overwhelm reaches that – We for saying that emerge business. a have until in-force growing grown to we've keep in been it the business, you're some your in-force begins the to scale, from to And plowing this growing you're business certain what its the business, work that by earnings – the growing time plowing back in, fundamentally particularly you're and way reaches the back by premium rapidly. when you're in dust. from you're nature the pretty distribution, life begin it, the the economics agency growing and

so and is emerge, ahead. earnings see And It of maturity, that to Go what exactly Go didn't surprise us. point it ahead, you'd place. was said a and taking begin that is Phil. we that hitting

Philip V. Bancroft

growth very we is had because under I'd Pac, management. thing and higher to that the assets Asia grow only begun investment income that saw The add in we've we to strong

think together with makes that what's the growth. is So, creating Evan point that the I

group has combined some also addition, earnings America our momentum. North In

Evan G. Greenberg

my mentioned commentary international But was the in I business. life what

Philip V. Bancroft

talking overall about the life. I'm Yes,

Evan G. Greenberg

Yeah.

Jay A. Cohen

Got it. Thanks.

Operator

Paul Newsome take a from now We Sandler ahead. go of question O'Neill. Please

Jon Paul Newsome

Good sustainability morning. of price A couple wanted of sort the One, to I of increases. briefly questions. revisit

into by the quarter, the pricing that month modest that the in second I us that, quarter, confidence sort month, of, get sort seeing lot and the through think, improvement we'd of even continued as by Has month see Chubb you in of environment suggesting was were first more. we gave that month second acceleration, a quarter?

Evan G. Greenberg

was of June the well, best quarter. month the Yeah,

Jon Paul Newsome

suggests on technology own, on have which benefits time. topic? reduced in their view that can a as are of broad. my got lot scale the second because as bigger technology is good the some and that's companies that bit smaller little over produce the technology that that that then, question that's the a arguing the that And has any such for changes companies, good of So, think of that larger companies such you Do changed I've or news. outsourced is true, more have just

Evan G. Greenberg

Well, yeah.

First you box. simply but out you technology of ready-made of whether the it buying, a you're most it �� of buying, not you're build something or and buy all, like,

components buying to different whether or it buy costs of you're you You're money. the work. build And you together them it, them putting and by technology, make it way,

do ability the do much And product tools on can acquire to place how Who's scale data. tools, way, to way, you put have do that how then, spend? in that you areas to by can it? many the can you data? areas – many And your geographies, can how that and And you into afford insight customer Across ability it? by got so your and gain data. And help again, you what data,

a it's if well, you can a sure, strategy, I'll don't scale, get and think, you what, or digital, thrive, matters. tell have you scale analog size but have whether you to it's you certain and sure, I

Jon Paul Newsome

Terrific. Thank you.

Evan G. Greenberg

You're welcome.

Operator

Ian go We will Balyasny. Gutterman question now a Please take from of ahead.

Ian J. Gutterman

in sense let's I us some go A Evan, couple give to perspective, ones. magnitude you be can your a would in this other give of Mexico, Mexico you but you asked, were give the and you. deal you some number to – one can three branches Citi mine the just us us forth, Thank mentioned of of the relationships this. Hi. know of mentioned of top but other some way or so

Evan G. Greenberg

Well, it's our I in Mexico. can pretty tell single you relationship clearly largest

Ian J. Gutterman

it. Got

Evan G. Greenberg

Chubb were years only way seven largest second now the ago. in it, number writer to is We a few Mexico. non-life the Ian, put

– what a, business, good is and with and and with have that continues agency-driven good business, direct growth marketing. stable be brokerage We to combined an ratios. It's

XX the We country. branches across have, like,

the agents. We have the thousands of that's of predominant source business. And

a have we've opportunity the whole product up of many the write we're market We largest that write is set, auto us. new what will we substantial write write we as surety, second for middle open channels a small Now, We that, auto country, commercial. our writer complement relationship commercial. in an health, They With example. customers. added accident and

All digital customers. offered marketing of also that through their be will their branches, to direct and and now through

business. to So, great is dimension what another it adds a

Ian J. Gutterman

there side? on that And do is that or is over to Obviously, That channel, is to time too? is similar a great. as A&H marketed sounds different lot of there the this something Or opportunity well. direct a do opportunity

Evan G. Greenberg

Citibanamex? the In

Ian J. Gutterman

Yeah.

Evan G. Greenberg

all includes of health. and it Oh, accident our

Ian J. Gutterman

Okay, I you I'm sorry. said... thought

Evan G. Greenberg

that's – a will transactions by distributed them with talk... with a distributed you – digitally, digital, in Most you way, start with digitally, That distributed digital. complete to be the want many and call They the phone – phone. that's instances,

Ian J. Gutterman

Right, right, right.

Evan G. Greenberg

or ...whether it's whatever. small it's commercial

So you're channels direct plus matching branches. mixing and through their

Ian J. Gutterman

it. Got

Evan G. Greenberg

So, our is all the area product core with of strategy health accident a and in Citibanamex. actually

Ian J. Gutterman

is, hear – to, a account the accounts of I jury question being we're stuff awards from, book normally, seeing, and accounts. be just good a loss the make some extent, time I large large maybe it's pruning a we large the and frankly, and guess, outsized trends case of that maybe where I'd given this happy little a us emerging business, of careful new retention? to willing insure retention, little be our And Perfect. still strong business. who bit give account you're to deeper at managing in guess dive more I liability that on one sense very and you concern keep with And Can sort some just and major able that's and grow some coming on a you're how my point. my being professional, I very can guess if given and, is, to just could to one very high

Evan G. Greenberg

Yeah, conflating – in of think we're I a whole not different things you're bunch there.

Ian J. Gutterman

Okay.

Evan G. Greenberg

see trends trends severity well. a trends that, And have behaving Casualty give reasonably pretty been modest. have been what Paul on loss we have little bit O'Connell down, frequency actually been and but could is

in casualty. we some pickup So, haven't seen adversely

and just should we to large point. We X about I know write talked casualty, said and about public account D&O, on casualty put – rate thing you I'll the in business, have got what side. By large quarter We're terms. one is, account exposed way, remember, the attachment The of rate. U.S. excess you and pressing our we've points it's this that

Ian J. Gutterman

Right.

Evan G. Greenberg

have rate. all I We're than we time. terms measure know is about much a said, with this underwriters. that is more the We lot that or all win, rates. – it of or price the and we're we And our don't because chance to awful discipline, in by underwriting of a have the write just presented way, an terms don't win we business simply to

a is have You renewal I offer know customer business better that I the a business know, know so me versus I don't book of books and a retention, on I the that customer.

Ian J. Gutterman

For sure.

yeah. inflation premise For seems guess my start pick up, social to seeing sure. was, I we're like it

Evan G. Greenberg

rate, we're like, we underwriting It's walking sort like like the we don't we rate, make can't if and the don't if away. of profit, an

Ian J. Gutterman

I would've Oh, sort but pickup the And it again, like of I involved the was, more account nine-figure course, a we're large seem I the understood, side large know there's asking seeing does be pickup, absolutely, the small in more reason nationwide. just was there'd absolutely. where most thought a jury seems I of the like for to place was just this on because – account lot thinking is be concern anecdotal, limits and it of mid. would the awards

Evan G. Greenberg

– we're what not We're you're portfolio seeing not a seeing on basis. anecdotally,

Ian J. Gutterman

Okay.

Evan G. Greenberg

tail. reasonably writing although (XX:XX) in trying you have exposed a out large talking Bermuda, ultimate a U.S. typically don't million to by casualty excess high it's those first not limit award And write our write too, keep putting huge business, to Ian. see million great primary that to way, mind, in in jury excess million what the within of you limit, we as write $XX limits and see we're of even – you're as and so you what settlement, then, $XXX out large our particular, And behaving that's and – – well, now. has and to it. because We're long relate in it We I'm We limit the net, $XX one-offs.

Ian J. Gutterman

right. All Thank it. you, agreed. appreciate Understood,

Operator

question now Shields will We KBW. Meyer of a take from

Meyer Shields

morning. Good Thanks.

quarter, question, I driving a you Just brief could and a in grew was more year-over-year on what's hoping than that talk bit a about administrative basis that. first little expenses the

Philip V. Bancroft

in particular. Nothing, nothing

assume for then you and exchange, foreign did when I you Just normal adjusted that. operations,

Meyer Shields

Yeah, to my of the best ability.

Okay.

Second workers' compensation we're States? but improving you profitability. about generally I rate the seeing bit United in question, a talk can decreases, little mean,

So, I was terms just like picture. in hoping macro for the some of insights

Philip V. Bancroft

play picture, have the cut on macro Well, low ways – can unemployment, which workers' actually you both comp. record

tame. to of careful. have Severity reasonably loss experienced up have on less been been until you job, We've been has frequency You so down. frequency be the now, workers seeing has

comp. have And so in trends been cost good overall loss

I bigger to have think aggressive, not my too the has become own reacting market that market. is careful picture me. you're you and I more to be that, the the in insurers, comp overshoot have And mind, the think That's – you you for competitive. to

Meyer Shields

perfect. so Thanks much. Okay,

Helen Wilson

And for time one please. we have person just ask questions, more to

Operator

ahead. take We from this question will of UBS. Meredith go Please Brian

Brian Meredith

Thanks.

quick for here you. ones couple a Just

some prices, or in to be are business impacted? U.S., profitability we're the to going where First, big loss crop prices, obviously of from – threshold corn How drop insurance we or that in away meaningfully soybean given the kind far agricultural domestically tariffs. a see the

Evan G. Greenberg

I'll make comments. two Brian, Yeah,

it's and a only, were within last crop the like too corn drop, soybeans deductibles. concentrations in in we at crop, Number – the it's February two, is I year than range, – $X.XX our watch to as And too of condition crop good average. crop, number better – the as, when are, like or I think closely. our $X.XX, were yesterday. and last I I on was the know contracts can – five-year Chubb's priced given book corn so speak which the believe, this price the – is corn where First, I one condition our early the don't

farmers change, you're not So was, deductible. is to threshold where at XX%. about was around as book And average say. our at they little you're right moment on buy $X within you this XX% less, closer at which soybeans buy When that or Corn look the soybeans, deductibles. and that – you're you'd the a

Brian Meredith

same income Phil, Phil. quarter. then And questions there? Thanks. unusual for And question. odd interest helpful. That's quick just numbers this Great. also Anything looked other on then two expense, a little

Philip V. Bancroft

on higher PE had we income, we other expected Yeah, own so greater where than X%. than income,

we than that bigger higher ownership X%, expected. and we have include was other that income, that's when than we a partial So, in

on last higher year-to-year investment, We the that income. we had And in had capital then, income insurance also drove in investment year, And our other a change one-off charge our all China. Switzerland. in

Brian Meredith

Great.

Philip V. Bancroft

variable And components, we've and expense quarter variable we component. and that includes past, then with related in interest expense, as the interest in higher-than-expected have said both collateral interest world. had the that expense cash our We a hold and higher that for various manage on had usage of paid we use to fixed facilities more clients, we we to the the around also this expense

Brian Meredith

or run So, is $XXX number good million is there... number a rate that

Philip V. Bancroft

$XXX million a use million. $XXX to of would I range

Brian Meredith

it. Appreciate Thanks. Excellent.

Helen Wilson

with again good your for this We look you and you and Thank to speaking the forward end attention at day. of Thank you, morning. quarter. next time

Operator

this conference conclude you for Thank your call. and participation. Ladies will today's gentlemen,

You may disconnect. now

Chubb Limited (CB) 25 Jul 182018 Q2 Earnings call transcript