Chubb CEO Evan Greenberg flags 'naive capacity' in casualty sidecars on Q3 call

Chubb chief executive Evan Greenberg used the company's third-quarter earnings call to single out casualty sidecars, broker facilities and investor-backed managing general agents as capacity adding to an already competitive market. He called it "a lot of very naive capacity." The remarks were reported by Royal Gazette Bermuda Re.

"Sidecars and broker facilities, blind follow facilities, more MGAs with capital behind them … this is all throwing out of balance the supply relative to demand," Greenberg said, according to the report.

He also described, without naming the firm, an arrangement in which backers of a casualty sidecar had it "arranged to pass the tail back to the carrier that is fronting it, who is going to end up holding the trash." He questioned whether the capital behind such vehicles had priced the loss-cost environment: "I think a lot of that clever capital does not understand the pricing versus the loss cost environment."

Greenberg said competitive conditions are "spreading to more casualty lines, where pricing in numerous areas is failing to keep pace with loss costs." The wider commercial property and casualty market is getting more competitive, particularly in the United States and London.

According to a Fitch Ratings survey at last month's Monte Carlo Rendez-Vous, 60 per cent of 93 respondents expected property catastrophe reinsurance prices to fall at the January 2027 renewals. The market already saw sharp price reductions at the January 2026 renewals, when, the report said, record global reinsurance capital of $760 billion — including $124 billion of third-party capital — favoured buyers. The survey asked about property catastrophe, not casualty, so it does not directly measure the casualty pricing Greenberg described.

Chubb reported quarterly core operating income of $2.98 billion and a combined ratio of 84.1 per cent, and has reduced exposure in some property and financial-lines business on pricing or terms.