Chubb CEO says climate change has created ‘tremendous volatility' for insurance companies - NBC New York
Chubb CEO says climate change has created ‘tremendous volatility’ for insurance companies - NBC 5 Dallas-Fort Worth
- Chubb CEO Evan Greenberg told CNBC's Jim Cramer that climate change is impacting insurance costs.
- He also named general inflation and litigation as other factors driving insurance pricing.
- Chubb shares jumped in mid-May when Warren Buffett announced the company was Berkshire Hathaway's secret stock pick.
Chubb CEO Evan Greenberg told CNBC's Jim Cramer on Thursday that climate change is one factor that's driving the price of insurance.
"Climate change has created tremendous volatility, and it continues to evolve," Greenberg said. "And the concentrations of values in areas where, where the climate – the impact of the climate – is greatest continues to increase."
Known for insuring businesses and wealthy individuals, Chubb is also a major insurer of agriculture, Greenberg said. According to him, 60% of Chubb's business is in the U.S. while 40% is outside the country. Geenberg added that Chubb's "two biggest regions" are North America and Asia, which he said he thinks have the greatest potential for economic growth in a broad sense.
Get DFW local news, weather forecasts and entertainment stories to your inbox. Sign up for NBC DFW newsletters.
General inflation and litigation costs are also sending insurance prices up, Greenberg said. He claimed that litigation is a "money-making industry" which "constantly perfects new theories of liability." Greenberg added that corporate America and, in turn, the consumer, shoulder the weight of these costs.
"We intermediate money, we don't produce money," he said. "And so, therefore, reflecting loss cost, when you think general inflation, when you think climate change, when you think litigation, that is driving the pricing of insurance."
Chubb shares jumped in mid-May when Warren Buffett announced the company was Berkshire Hathaway's secret stock pick. At Wednesday's close, Chubb was up 16.7% year-to-date.
Money Report
Chubb provided former President Donald Trump with a $91.6 million appeal bond in March after he was found liable for defaming writer E. Jean Carroll after she accused him of rape. Days later, the company backed out of talks to provide Trump's $464 million appeal bond in his civil fraud case.
Sign up now for the CNBC Investing Club to follow Jim Cramer's every move in the market.
Disclaimer
Questions for Cramer?
Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer's world? Hit him up!
Mad Money Twitter- Jim Cramer Twitter-
Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”