The commercial insurance sector is experiencing a flight to quality according to Chubb CEO Evan Greenberg, while at the same time the re/insurer is experiencing continued tightening of pricing, which is spreading further into new lines of business and even other territories.
Greenberg is always a source of interesting market commentary and given his re/insurer Chubb’s global footprints in insurance and reinsurance his discussions on rate are worth heeding.
In this instance Greenberg also provides an interesting insight into an area of opportunity for some in the insurance-linked securities (ILS) space, the commercial insurance market where increasingly we see collateralized sources of reinsurance capacity looking to back portfolios of risk.
In announcing his firms second-quarter results, Greenberg explained that market conditions continue to improve in 2019.
“We benefited from an improved pricing and underwriting environment, flight to quality from commercial insurance buyers, and our various global growth initiatives,” he explained.
With catastrophe exposed commercial property insurance portfolios an area that the ILS market would certainly like to put its capital, this is interesting news, as it suggests ILS backed initiatives with quality underwriting and servicing of customers could find they benefit from any flight as well.
In addition, Greenberg said that Chubb is experiencing improving conditions more broadly now, with rate increases spreading further across the market.
“Pricing continued to tighten in the quarter while spreading to more classes and segments of business, particularly in the U.S. and London wholesale market,” he explained.
The improved pricing is also being seen further afield as well, resulting in opportunities that could see Chubb deploying more capital abroad in future.
Greenberg said, “We’re also seeing early signs that market-firming conditions are spreading to more territories around the world.”
Another sign of the improved market conditions, that will also benefit insurance-linked securities (ILS) funds and investors targeting underwriting insurance from further up the market risk-to-reinsurance-capital chain