It is becoming increasingly clear that a hardening property/casualty insurance market has accelerated and gone global after initial signs first materialized earlier in 2019, Chubb Chairman and CEO Evan Greenberg said.

“In my judgment, given some of the market dislocation we have observed, including a reset of risk appetite on the part of some, this firming trend is sustainable and is likely to accelerate and spread,” Greenberg said during Chubb’s Q2 2019 earnings conference call on July 24.

Greenberg added that the market hardening he sees “is income and loss reserve driven, not capital driven.”

Greenberg’s comments come after Chubb reported a 6 percent rise in premiums in its North America Commercial operations for Q2 and a 9 percent premium increase in its Overseas General division. Greenberg said in comments issued with Chubb’s 2019 Q2 financial statements that pricing tightened in more classes and segments in the business during the quarter, particularly in the U.S. and London wholesale market. He has also noted signs of market firming elsewhere around the world, elaborating on July 24 that firming has spread in some risk classes to continental Europe and Southeast Asia.

Greenberg’s focus on the topic follows comments from W.R. Berkley Corp. President and CEO W. Robert Berkley Jr. on the matter in April 2019. Speaking during the company’s Q1 2019 earnings conference call at the time, Berkley noted the market was finally showing signs of hardening, two years after historic property/casualty insurance catastrophe losses.

An analyst asked Greenberg to elaborate on what he meant by the market hardening being “income and loss reserve driven,” and he responded by explaining the fundamentals of what he sees.

“The rate has not kept pace with loss cost trends, and that puts pressure on income and it puts pressure ultimately on reserves. Balance sheets over time have less redundancy in them…You have a loss cost environment that in many ways in the headlines is stable, but you have areas in casualty and catastrophe and other areas within the business where there is volatility and there is trend pressure,” Greenberg said. “My comments meant to imply all of that.”

Greenberg explained that he sees plenty of capital around, but it is more disciplined at this moment, and it is deployed when rate and terms are more adequate.”