Chubb sees growth in AI risks and data centers as commercial competition increases
Chubb reported third-quarter core operating income of $2.98 billion, down approximately 2% from a year earlier, while operating earnings per share rose about 1% to $7.66. P&C underwriting income approached $2.1 billion, with an 84.1% combined ratio, and adjusted net investment income reached a record $1.89 billion.
The results came as Chubb continued to reduce selected property and financial lines exposures. North America Commercial premiums declined 2.7%, with nonrenewals and additional reinsurance reducing growth by approximately 4.5 percentage points. Overseas General premiums rose 6.7%, while North America Personal Lines grew 5.3%.
CEO Evan Greenberg expects North America Commercial growth to improve as the impact of those underwriting actions diminishes and opportunities in small and middle-market business contribute more.
At the same time, he warned that competition is spreading beyond property into casualty, where pricing in several areas is failing to keep pace with claims costs.
“There is a lot of hungry and extremely naive capacity available,” Greenberg said, pointing to casualty sidecars, broker facilities and capital-backed MGAs as sources of additional supply. He also questioned whether some investors understand the long-term claims exposure they are taking on.
AI creates coverage and operating opportunities
Greenberg said AI liability is an emerging exposure that existing casualty underwriting has yet to fully address. He expects insurers to respond through coverage clarifications, exclusions and separate AI liability products, with pricing reflecting differences between customers’ risks.
Standards for model certification and the governance of AI and agents could also become tools for underwriting.
“I can imagine best practices in management and governance of AI and agentics emerging quickly and evolving from there. And these will be tools that will also assist in insurance underwriting. So, you know, while that’s a mouthful, I think that gives you all the elements of how the industry will approach and address AI liability. As an industry we have to put our arms around this, and frankly we’ve had to do this with emerging liabilities over the last 50 years, and there’s a pretty good template to follow.”
– CEO Evan Greenberg
Within Chubb, management said technology investments are already contributing to lower administrative expense ratios. Greenberg described applications across underwriting, marketing, claims, finance and sales, combining foundational technology and data with algorithms, large language models and agentic capabilities.
Data centers and Asia support the growth outlook
Chubb sees data center development generating business across construction, marine and surety, with operating coverage opportunities still ahead. Greenberg said permitting, energy, labor and supply-chain constraints are delaying projects and affecting when insurance business can bind.
He also remained optimistic about Asia, citing infrastructure investment, supply-chain activity, digitization and growth among small and midsize businesses.
In affluent personal lines, Greenberg emphasized coverage and service as competitive advantages. “It is an agent-driven business and relationship business between the customer and us,” he said.
USI sale expected to generate $460 million gain
On investments, Chubb said its Strategic Holdings partnership with KKR agreed to sell its investment in USI Insurance Services to Aon. Chubb expects a realized gain of $460 million on an investment of $740 million.
The company’s invested assets exceeded $175 billion. Its fixed-income portfolio yielded 5.2% during the quarter, compared with a new-money investment rate averaging 6.2% at September 30, supporting management’s expectation of further growth in fixed-income investment income.
