Paul Newsome: Good morning. Thanks for the call rest of the year. I was hoping you could give us a little bit of additional color on what we’ve seen at Chubb from exposure changes over the last, say, couple of quarters, is that we move into 2023. And there are some folks including our strategists, that thinks we’re going to be in a recession sometime this year. I was wondering if €“ so what are the sensitivities among your books, what parts of your business would we see if it happens in the future and what parts would be less sensitive to assessments and exposure changes?
Evan Greenberg: Yes, I’m not going to go deep into that, but you €“ I will relate you back in my commentary where I said that the industry in casualty needs to get more rate to keep pace with loss cost and one of the things that is in my €“ on my mind in that regard is you can’t rely on price as much going forward in casualty, which is about sale, you rate off of sale or you rate off of payroll, you rate off of human for business-related exposures. It could be square footage and to measure traffic of consumers coming through. These are all economically related exposure movements. And that will €“ whether we have recession or we don’t have recession, I don’t think that’s the point. The point really is as economic activity relative to €˜22 and €˜21, certainly, is going to be slower.
And so you need rate, pure rate and can rely less on the exposure on the percentage of exposure to help the performance when you think about rate to exposure and inflation and loss cost. That is more of what’s on my mind when I think about exposure. I don’t think about it as much in terms of growth overall and the support of our growth rate. And I think our growth rate will be just fine.
Paul Newsome: Then maybe as well, can you talk a little bit about the ability of both Chubb and the industry to pass on higher reinsurance costs to sort of primary commercial lines. Things have changed a little bit, I think, structurally over the years. And I think I’m not sure what the sensitivity is today in terms of how quickly the primaries lines will respond to higher reinsurance costs in today’s environment. But any thoughts there would be great, I think just to help us out?
Evan Greenberg: Well, I can’t speak to everybody else. And so you’ll just have to stay tuned and figure that out, Paul. But beyond that, I know when I think about short tail lines where you’re seeing reinsurance price increases, I’m not worried from a Chubb point of view of achieving rate and price to both keep pace or exceed loss costs. What we expect for cat and to manage increased reinsurance costs. I think that €“ and that’s why I gave you the fourth quarter pricing I think it’s €“ I think that speaks for itself that way.
Paul Newsome: Thanks a lot. And I will appreciate. That will help as always.
Evan Greenberg: You are welcome.
Operator: Your next question comes from the line of Greg Peters from Raymond James. Your line is open.
Evan Greenberg: Good morning, Greg.
Greg Peters: Good morning, everyone. So obviously, you commented this on your comments. So just letting you know I heard your comments, but I’m looking for further clarification.
Evan Greenberg: I can just repeat myself.
Greg Peters: Well, you didn’t say much about this. So hopefully, I can get a little more out of view. But I was I intrigued by your comment about the retention in commercial at 96%. And maybe you could give us some historical context and then more importantly, you talk about the moving pieces of the market, financial lines, workers’ comp? Do you have a view of how that might trend over the near-term? Are you willing to share with us should add?
Evan Greenberg: Yes. On your first question, it’s on a premium basis, the 96%. So it’s both policy count, customer retention in terms of unit count, and it has the impact of price of rate in there in the 96%. So on a policy count basis, on a customer retention basis, it is a lower number, but it’s €“ but on historic earns basis, it’s very high. It’s very stable our renewal book of business. And I think that’s reasonably true for the industry given where you are, there was so much movement of customer during the hardest part of the cycle in COVID and all of that. And as people pulled back capacity and so many accounts had to find a new home. And then you find that there is more stability in retention of customers, both distribution do they want to move it, the customers themselves don’t want.
And so you have more of a stability that way. So, that’s running at a high level. When I look forward on financial lines and comp, look, I can only give you €“ if I am going to prognosticate to you, I can only prognosticate what I would think would be logical and markets are never logical. There is all kinds of players. I do see in financial lines, more of the established players really know the businesses are more stable and showing more stability and recognizing that, okay, there has been €“ where are we on a risk-adjusted and at an expected loss cost basis. They have more insight into that and then a lot of small one of Visa . And so it creates a little chaos in the market that way, but I see a little more stability that way right now beginning to emerge.
In comp, I don’t know what to tell you. The market has to draw a line and I think that moment of truth is coming.
