A Wall Street Journal article reported on Chubb Chief Executive Evan Greenberg’s remarks on May 6 in San Diego at risk managers’ conference.
Greenberg put the blame for the current insurance crisis on regulators in California and other states who deny insurers the ability to charge the right price for risk.
Greenberg defended insurers.
He explained, “We haven’t told people to live in a high-wildfire zone, and we haven’t told them to build magnificent homes in a wildfire zone. I’m willing to insure them if I can charge the right price for the risk.”
Greenberg said insurers’ calls for rates that match climate risks send rational signals to regulators. But regulators are ignoring those signals and are trying to keep rates down.
Greenberg believes that the result of this price suppression will be that insurers will stop writing policies and taxpayers will be on the hook for the risk when policyholders flock to the California FAIR Plan and other state-created insurers of last resort.
The price suppression actions of California and other states aren’t sustainable.
Greenberg concluded, “The cost of climate change, to state the obvious: Going up. This is not a short-term thing that’s going to go away.”
