Bloomberg

(Bloomberg) -- Evan Greenberg, who built one of the world’s largest insurers by combining Ace Ltd. and Chubb Corp. this year, sought to portray the merged company as a more stable alternative than hobbled rivals who are seeking to rebound.

“When there’s a wounded animal loose, be careful, stay out of the way,” Greenberg said Thursday on a conference call discussing first-quarter results, when asked by Barclays Plc analyst Jay Gelb about the competition for market share among commercial insurers.

Zurich Insurance Group AG and New York-based American International Group Inc. are among insurers that have reshaped underwriting leadership in recent quarters after being burned by higher-than-expected claims costs. Shares of Zurich and AIG have each dropped about 12 percent since Dec. 31, compared with the 4.3 percent year-to-date gain at Greenberg’s Chubb Ltd. as of 10:47 a.m. in New York.

Greenberg, a former executive at AIG, didn’t name the rivals he was thinking about. He has said he’s prepared to sacrifice premium revenue to competitors who are willing to settle for lower margins to win business. Still, disruption in the market could favor his Zurich-based company in the long run, he said.

Double-Edged Sword

“It’s a double-edged sword, and you’ve got to be careful,” Greenberg said. “We’re in a market where it’s competitive, and some things are being sold at prices that are below costs we think are reasonable. On the other hand, there is this pull and desire for stability and certainty, and familiarity, and that is drawing more toward us.”

Greenberg on Wednesday posted first-quarter net income of $439 million. That compares with a $183 million loss at AIG, which was hurt by the poor performance of hedge fund investments. Zurich is scheduled to report results next week.

“We represent a very attractive market, and alternative, for large accounts seeking a deep balance sheet, great underwriting expertise,” Greenberg said.

Greenberg expects to cut $750 million in annual expenses by 2018 due to the takeover, which is $100 million more than the original plan, according to a statement Wednesday. Chubb also expects to boost investment income by as much as $120 million annually.

To contact the reporter on this story: Sonali Basak in New York at sbasak7@bloomberg.net. To contact the editors responsible for this story: Dan Kraut at dkraut2@bloomberg.net, Steve Dickson

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