Chubb (NYSE:CB) CEO Evan Greenberg appeared on the FOX Business Network Thursday to discuss the recent wave of hurricanes and earthquakes and their impact on the insurance industry.
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“We’ve had three hurricanes and two earthquakes in a month’s time. The suffering, the enormity of the tragedy, just to human life, you know, our hearts go out to all these people and our job is to support them in their time of need right now,” he told Mornings with Maria host Maria Bartiromo.
Greenberg then responded to Warren Buffett reportedly commenting that GEICO, a subsidiary of Berkshire Hathaway (NYSE:BRK.A), suffered greater losses due to Harvey than due to Irma, telling Bartiromo: “Harvey was more of a flooding event than a wind-related event and I think that’s the Berkshire comment about more impact on automobiles. Irma was an enormous event, more wind driven than flooding driven.”
Greenberg discussed the potential costs of Harvey and Irma, saying, “No one has a great handle on this yet but you know, it has to be in the $50-$70 billion range in total.”
According to Greenberg, the government’s role in dealing with natural disasters is more related to relief and recovery.
“But when it comes to insuring these events, particularly when you get to the peril of flood insurance, the private sector can do much more. And frankly, the government distorts markets, it distorts behavior of individuals by underpricing and encouraging people to live in areas where they’re at peril.”
Greenberg says much of the losses due to Harvey have already been examined by adjustors and they are making progress in examining the losses from Irma.
“We’ve got over 400 adjustors on the ground in just Irma and Harvey alone. We’ve already examined over 75% of all the losses that have come in on Harvey and we’re well on our way to doing the same thing under Irma. We’ve got teams on the ground in Puerto Rico right now and more flying in as soon as the airports allow and [are] opened.”