Operator: Your next question is from the line of Mike Zaremski with BMO. Your line is open.
Mike Zaremski: Good morning. First question on reinsurance costs. Any — given industries experiencing higher reinsurance costs, both on property and on the casualty side and maybe that’s not the case for Chubb. Feel free to correct me. Is Chubb contemplating any changes in its strategy, maybe retentions? Or is this still TBD as things progress?
Evan Greenberg: No, no material change. And we obviously aren’t going to — as you can appreciate, I’m not going to discuss our own reinsurance program. That’s for our own protections, that’s proprietary. But our retentions have not changed in any material way. And we’ve got a big balance sheet. We take a lot of risk net. And we really don’t buy reinsurance for earnings protection so much. We buy it for — more for balance sheet protection. And depending on the line of business volatility and that’s been a steady policy of ours and we maintain it regardless of cycle.
Mike Zaremski: Got it. Follow up on market conditions. You gave us a lot of good color. If we — the acceleration in pure rate accelerated a lot more than I think there might have been a tad bit of a loss cost pickup just on the North America commercial side. But maybe you can kind of lend some more color on, do you feel the markets being more rational in terms of kind of adjusting to loss cost trends and also higher reinsurance pricing? And it sounded like you were optimistic that things have — competitive conditions have gotten a little bit better quarter-over-quarter. Thanks.
Evan Greenberg: Yes. I think it’s a little bit of a mixed bag. Property, certainly and short tail certainly responding. I think in larger account business, responding a little better than in middle market, though middle market has a stability to it. It’s more in P&C lines. I think that financial lines, certain areas of financial lines, it’s — and so in those areas, I generally like the tone. We’re seeing excess casualty, particularly in larger comp business respond. I’m imagining in time, middle market will need to and will. So rate is pretty — our rates are increasing there. When I look at professional lines, and you have to unpack it between financial lines between professional liability and there are all kinds of classes in D&O, both private and public D&O.
I think public D&O market, there are a lot of players with no data and no experience and they’re receiving many of them capacity by those who don’t seem to have their eye on the ball. And there’s an area where I think the market is overshooting the mark and of course we’ll always trade in that case, volume for and under the right underwriting. And it’s not an area that I think is devoid of risk, particularly as you look forward, everything from recession and volatility in financial markets to climate change and claims of greenwashing and all of that. So it doesn’t that — and that’s just a line on the margin. So it’s a mixed bag. Comp is overall experience is good. Exposure is growing. And on the other hand, you got to be careful on exposure because wages are rising.
That means indemnity, severity, prize and I’ve said it before, I point the market could shoot the market comps. So you got to be a little cautious. But overall, in direction, you see the direction in P&C lines. And I think that direction is a tone that will continue and a pattern that I expect will continue.
Mike Zaremski: Thank you.
Operator: Your next question is from the line of Yaron Kinar with Jefferies. Your line is open.
Yaron Kinar: Thank you. Good morning. My first question, I guess more specifically to North America commercial. Do you see the overall book —
Evan Greenberg: — but anyway, go ahead.
Yaron Kinar: Well, I could do that, but I’m not sure we have enough time. With North America commercial, do you see the book overall as rate adequate today?
Evan Greenberg: Yes.
Yaron Kinar: You do. So with that in mind, I guess, why would we not see more acceleration of premiums given that rates are adequate and picking up, why wouldn’t you lean into that a little more with greater exposure?
Evan Greenberg: What you said overall. And so that’s overall. And then — and so I’m happy to answer overall. And by the way, I said to you 10% growth in P&C lines. And I said financial lines, professional lines, financial lines in aggregate down. So I think in areas where we like the pricing, you’re seeing the business grow And I’ll leave it at that. I’m not going to go deeper than that. I think I gave — I just gave what investors need to know.
Yaron Kinar: Okay. And then my other question was on the G&A expense side. Seem to be a modest pickup in North America, both personal and commercial. Are there any specific platform investments you can call out? Or is it just wage inflation hiring?
Evan Greenberg: No. The expense ratio, you’ll know — was up because pension expenses — fundamentally is pension expenses with the rise in interest rates that picked up. And that’s just — that’s something that you can’t control really. It’s just — it’s an accounting adjustment for future pension costs on. We have a defined benefit pension plan that’s closed for many years, it was legacy Chubb that had that and so that’s the impact. That’s all.
Yaron Kinar: Got it. So is that a reasonable run rate to think of for the rest of the year?
Evan Greenberg: Yes, reasonable. You’ll note the pattern of expense ratio. It’s usually a little higher this quarter than in future quarters when I look at it.
Peter Enns: I think the pension will be consistent each quarter. And then there’s other stuff around it.
Yaron Kinar: Got it.
Peter Enns: For this year.
Yaron Kinar: Thanks so much.
Peter Enns: You’re welcome.
Operator: Your next question is from the line of Greg Peters with Raymond James. Your line is open.
