Taking a Stand.
The company also is active in other commercial lines and has a large personal-lines business. To counteract weakness in the standard commercial insurance segment, Chubb lately has been cutting unprofitable business and raising prices.
Defining events of 1999: For Chubb, it was our acquisition of Executive Risk Inc. Putting together Executive Risk with our existing executive-protection business, we've really created an underwriting powerhouse that will, without a question, be known for its creativity, responsiveness, speed to market, financial strength and all those other good things.
Surprise of 1999: For us, it was a pleasant surprise that our standard commercial rate initiative actually did better than we thought it was going to do. We went from rates being -5% a year ago to being up 6% now, so we're talking about an 11-point swing. And that's good. In many respects, we've lost less business than we thought we were going to lose. So that was the most pleasant surprise for the year.
Defining events of 2000: I would suspect that it would be the dawn of realization in the marketplace that convergence and consolidation of financial-services firms-performed mindlessly only for the sake of size--provide much fewer benefits to shareholders than they really thought. This is my feeling on mergers and acquisitions in general: You go through a period, you call it the "urge to merge." Then it's the "surge to merge." This develops into the "splurge to merge," which is followed by the "scourge of merging."
What emerging markets interest you in the coming year?
Without a question, the two new geographic markets that Chubb is emphasizing are India and China. We were lucky to become the fifth U.S. company and the second U.S. property and casualty company to get its license approved in China. The other U.S. insurance companies there are all life insurance companies. So we are very excited about the market in China. We have several offices there.
Also, I'm chairman of the U.S. India Business Council. India's new insurance laws will make it possible for Chubb to do business there. We can react to that pretty quickly since we already have an office in India.
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|Date:||Jan 1, 2000|
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