Insurance industry analysts asked for years about when rates in the mainline property/casualty commercial insurance market would harden. Now that they have, Chubb Chairman and CEO Evan Greenberg was confronted with an early question about whether rates will eventually nosedive within the next two years.

His message to analysts during the company’s Q2 2021 earnings call on July 28: Not yet, and there’s nothing to worry about.

“I can’t tell you what we’re going to see two years from now. I can give you a sense of my own judgment, because I don’t have a crystal ball,” Greenberg said. “Based on current market conditions – where I think they’re going over the medium-term right now – I think rates will continue to exceed loss costs. They’re exceeding loss costs right now by a reasonable margin.”

The thing is, global commercial insurance pricing has generated increases for 15 consecutive quarters, including the 2021 second quarter, according to a recent Marsh report, and Chubb was no different in enjoying bounty from the trend. But the Marsh report detected a continuation of signs of price moderation first detected in the 2021 first quarter. Eventually, softening rates can harden, but Greenberg wouldn’t go there.

Instead, Greenberg made the case for what amounted to stable increases, also arguing that Chubb has excelled in its rate management for some time.

“Chubb [in the] industry overall has been number 1 in achieving rates in excess of lost costs for just two years now,” Greenberg said, asserting the industry overall forgets this, and starts at a much higher loss ratio than Chubb specifically.

“To achieve a reasonable risk adjusted return [the industry] has to continue to achieve rate in excess of loss cost for an extended period of time,” Greenberg said.

He doesn’t see rate softening coming in any great degree for now, with low interest rates and outside risks in the external environment including cyber, climate change, and litigation trends.

“I gave you year-on-year movement in pricing, in rate, so you would have a perspective as you think about the rate of increase declining going forward,” Greenberg said. “That is natural, but it is well in excess of loss cost and I believe that will continue.”