Chubb's Evan Greenberg says insurer just had the best year in its history
California is a tough market for insurers — and growing more so, according to Chubb CEO Evan Greenberg.
The executive has long proclaimed that Chubb won't write insurance where it can't get a reasonable return for taking on risk. And it's that approach that helped it report strong 2024 results.
"We had a great quarter, which contributed to an outstanding year. In fact, the best in our company's history," Greenberg told analysts on the company's fourth-quarter earnings call.
Chubb shares are trading 3% higher on Wednesday. The stock has risen 13% over the past year, but has been under pressure this month as the Los Angeles area battled costly wildfires. Chubb, along with Allstate and Travelers, are among the publicly traded insurers expected to have some of the greatest exposure.
Greenberg kicked off the company's earnings call immediately addressing its exposure to the disaster. Right now, it expects to see $1.5 billion in net pretax costs in the first quarter.
Chubb had reduced its exposure by 50% in the areas where wildfires occurred, he said.
The state, as well as consumer advocacy groups, are preventing insurers from charging premiums that truly reflect the risks in the area, he said, explaining that the artificially suppressed prices are only encouraging people and companies to opt for riskier places to live and work.
"Frankly, it's an unsustainable model, and one way or the other, the citizens of the state paid for the price for coverage," he said. "California is not alone in this regard, but it certainly stands out."
Greenberg expressed confidence in Chubb's ability to manage the risks the industry faces.
"While we're in the risk business and there's plenty of uncertainty in the world, we're confident in our ability to