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Greenberg says new high-net-worth personal lines writers will require luck, patience


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Greenberg says new high-net-worth personal lines writers will require luck, patience

EvanGreenberg welcomed newcompetitors to the high-net-worth personal lines business, but theChubb Ltd. chairmanand CEO said they will have their work cut out for them.

"Firstof all, when we did the merger," he said during a conference callregarding the January combinationof ACE Ltd. and Chubb Corp. that resulted in the formation of the new Chubb, "weimagined … that as a result of putting three of the four major players in highnet worth together that you would ultimately breed additional competitors inthat space, and I've said that from the beginning. And that is a healthy thing."

ACEhad bolstered its presence in the marketplace through the April 2015 purchaseof renewal rights to Fireman'sFund Insurance Co.'s high-net-worth personal lines business. TheJanuary deal brought about the combination of two of the three remaining entitiessaid to rank as the market leaders, joining American International Group Inc.

Anumber of carriers, most recently W.R. Berkley Corp., have indicated during the past two years in newsreleases and/or product filings that they planned to launch or accelerate theexpansion of their operations in the market niche.

"Themarket needs choice, No. 1," Greenberg said. "No. 2, it isn't aboutthe roughly $10 billion high-net-worth market or $8 billion or whatever it isthat exists today. It's about the market that we imagine is in the $30[billion] or $40 billion range of those who require or really need a richerproduct that is rich in service, rich in coverage, rich in benefits, and moreabout service and benefits than it is about price."

Hesaid many of the prospects with "a lifestyle and assets to protect"obtain their coverage from "standard lines companies right now, and thelong-term play is to attack them and serve them in the high-net-worth market."

Greenbergcalled Chubb "the gold standard" of the high-net-worth business, andnew market participants would require "years of investment and attention"to compete effectively.

"Youdon't build something like this overnight," he said. "Thecapabilities you have to bring in terms of service capabilities, both risk andengineering services, to individual customers and the claims-servicecapabilities and the richness of the coverages and the ability to service themall over the globe, I'll tell you what, that's not an easy lift. And you winthese customers one by one, and the average premiums can vary anywhere wherefrom $5,000 to a couple of hundred thousand dollars, and it's hard work."

Hesaid it is a good business "if you do it right," but it requires "alot of patience and a lot of capital and good luck. And by the way, we'll putthe welcome mat out for you."