Evan Greenberg has warned that today’s softening property market is “structurally” different from past cycles, pointing the finger at MGA volume incentives, alternative capital and a longer chain of intermediaries. The Chubb chairman and chief executive cautioned that capital providers will ultimately pay the price.

On the insurance group’s first-quarter earnings call, Mr Greenberg said that in the shared and layered property markets in North America and London, overall market pricing is already down about 25 per cent in the quarter and “heading to a third”.

“You can actually see it’s accelerating in that trend,” he told analysts.

While supply-demand dynamics are a feature of every cycle, Mr Greenberg argued that this one is being driven by how capital is entering the market, particularly through managing general agents and reinsurance.

“The structural difference this time is simply how the capital is showing up, and it’s showing up, a lot of it, in a volume-based incentive system,” he said.

“MGAs, you know, the majority of them, it’s just volume based. What do they bring? They bring a cheaper price and a higher commission, and it’s the reinsurance market, and it’s alternative capital and the number of bites of the apple in the supply chain by intermediation,” he explained.

“And by the way, the loser at the end of the day is the ultimate risk taker who puts up the company.”

In Bermuda, insurers and sidecars have been key capital providers behind US and London E&S programmes and MGA structures. Mr Greenberg added that the lines in question are short-tail, meaning poor pricing decisions should make themselves known quickly.

“This is short-tail business. The report card comes home rather quickly, so stay tuned,” he said.

At the same time, he pushed back on the idea that the softening is because of the risk environment. In property, he said, neither attritional losses nor catastrophe risk explain recent rate cuts. In the US, losses totalled more than $60 billion over the past five years.

“I haven’t noticed that the attritional loss environment in property as changed,” he said. “And on the cat side, well, unless you believe that the models are wrong or that somehow the climate environment is going to change, then we have inadequate pricing.

“And inadequate pricing in property tends to reveal itself pretty quickly. You go to a dumb place pretty quick, then the reaction the other way ought to be quicker.”

Chubb itself has responded by shrinking in areas where it sees pricing as “woefully inadequate” and by purchasing additional reinsurance. Mr Greenberg said the group has shed roughly half the volume in certain large-account property segments and is using reinsurance as one of several tools it uses to manage exposure.

The CEO also challenged the current narrative that the excess and surplus market is more disciplined than admitted business. Admitted carriers sell state‑regulated policies with a safety net, while E&S carriers operate outside that system, offering more flexible, custom coverage.

“I look at middle market and small commercial E&S versus admitted [and] admitted is much, much more disciplined. E&S less so,” he said, calling some of the competition in E&S “terribly illogical”. He added that Chubb is already seeing some business begin to drift back to admitted carriers as the market softens.