Greenberg criticises broker behaviour
Chubb CEO and industry veteran Even Greenberg has accused some brokers of "abusive behaviour" when dealing with others in the market.
Writing in Chubb’s 2016 annual report, Greenberg said that he sees "abusive behaviour on the part of some brokers who enrich themselves at the expense of both their customers and underwriters.
"Cloaked in the mantra of ‘customer best interest’ or ‘treating customers fairly,’ they seek the cheapest price and broadest coverage at commission terms that by any measure are excessive. Forcing underwriters to succumb to the lowest common denominator is hardly in the customer’s, or industry’s, best interest."
According to Greenberg this behaviour on the part of brokers is a reaction to the soft market, where re/insurance rates are under pressure because of excess capacity. Greenberg stated that the brokers’ behaviour is not sustainable and he warned that it may result in them losing business eventually.
Greenberg continued: “These predatory behaviours, which have shown up around the world, and in London in particular, are simply unsustainable from an underwriting perspective and will come back to haunt these brokers: there will be customer and regulator backlash, or worse. Remember, distribution can be disintermediated.”
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