Chubb Limited

your question, press star 1 again. I would now like to turn the call over to Karen Byer, Senior Vice President, Investor Relations. Please go ahead.

Thank you, and welcome to our March 31, 2025 first quarter earnings conference call. Our report today will contain forward-looking statements, including statements relating to company performance, pricing, and business mix, growth opportunities, and economic and market conditions, which are subject to risk and uncertainties, and actual results may differ materially. Please see our recent SEC Files, Earnings Release and Financial Supplement, which are available on our website at investors.job.com for more information on factors that could affect these matters. We will also refer today to non-GAAP financial measures, reconciliations of which to the most direct comparable GAAP measures and related details are provided in our Earnings Press Release and Financial Supplement. Now I'd like to introduce our speakers. First, we have Evan Greenberg, Chairman and Chief Executive Officer, followed by Peter Enns, our Chief Financial Officer. And then we'll take your questions. Also with us to assist with your questions this morning are several members of our management team. And now it's my pleasure to turn the call over to Evan.

Good morning. Let me begin with a few words. around the external environment. There is currently a great deal of uncertainty and confusion surrounding our government's approach to trade. It's impacting business and consumer confidence, as well as our image abroad. The odds of recession have risen substantially, and higher inflation is all but certain. To what degree? is an open question. We have competing priorities between our stated trade, economic and fiscal objectives, and coherence of policy has yet to emerge. I hope we can reach agreements on trade, reduce or eliminate tariffs, and reconcile our priorities quickly. Certainty and predictability are jacks to open for confidence. growth in the image of our country as a leader, a reliable partner, and a place to do business. As you saw from the numbers, we had a good first quarter, considering the significant catastrophe losses we incurred from the California wildfires. In terms of revenue growth, the headline number was impacted by foreign exchange due to the strong dollar, which has since weakened substantially. and one-time premium-related items in our North America business. We produced a billion and a half in core operating income, and it was down 31%. It was supported by excellent underwriting results, double-digit growth in investment income, and strong life insurance income. Total company premiums grew 5.7% in constant dollars. Our published combined ratio was 95.7 with underwriting income of $441 million, a notable result given 1.6 billion of CAT losses. Calendar year underwriting income was supported by a current accident year combined ratio of 82.3, a nearly one and a half point improvement from prior year, excluding CATs. Current accident year underwriting income was up 12%. Additionally, we had favorable prior year reserve development, $255 million. On the asset side for the quarter, adjusted net investment income was $1.7 billion, and it was up 12.7%. Our fixed income portfolio yield is 5%, and our current new money rate averaging five and a half. Tariffs and the federal budget deficit impact interest rates, the yield curve, spreads, asset values, and the dollar in ways that are not good for our country. As a company, we are predominantly buy and hold fixed income investors and benefit from higher yields. And as a multinational, our revenue and income benefit from a weaker dollar. In the quarter, our alternative investments produced modestly lower than usual private equity distribution related income. It's a combination of simply normal volatility and financial market conditions. Our annualized core operating return on tangible equity in the quarter is 13%. Peter's going to have more to say about the financial items. As you saw in the first quarter, we announced an agreement to acquire Liberty Mutual's business in Thailand and Vietnam. The two companies offer a range of consumer and commercial BNC products with distribution through 56 branches and 2,600 brokers and agents. Both fit well with our own business. The combined operations produced about $275 million in premiums in 2024, over 90% of which is in Thailand. For perspective, Thailand is now over a billion dollars in premium revenue for Chubb, non-life and life, and we're among the leading PMC companies in the country once the entities are merged. In fact, we'll be number four. We closed Thailand April 1st and expect to close Vietnam by early 26th. Now turning to growth, pricing and the rate environment. PNC revenue grew 3.2% per quarter, 5 in constant dollars, with commercial up 4.6, consumer up 6. Adjusting for the one-time items in North America, PNC premium revenue grew over 6.5 in constant dollars. All regions of the world contributed favorably. Premiums in our life insurance division grew over 10%. In terms of the commercial PNC underwriting environment, large account-related short-tail business, both admitted and ENFs, is growing quite competitive. A lot more capital is chasing the business. Prices are softening. We are, of course, disciplined, and we're not going to rate business below a technically adequate price. On the other hand, middle market and small commercial property, both admitted retail and non-admitted wholesale, or ENFs, remain much more disciplined and orderly. Rates, in fact, continue to rise, and we are growing in this area. Casualty continues to firm in all areas that require rate, retail and ENFs, with large account and middle market, and again, We're growing. Financial lines remain soft. The status backdrop, I want to give you some more color by division. And we'll start with North America, where premiums were up 3.4%. Growth, again, was impacted by the two one-time items I mentioned. Reinstatement premiums related to the California wildfires in personal insurance. And larger than usual, one-off structured transactions, think loss portfolio transfers, written last year in our major accounts commercial division. Adjusting for both, North America was up 6.4%, including growth of 10.1% in personal insurance, 5.3% in commercial. Commercial PNC lines were up 6.4%. and financial lines were down 1.3. Looking through those one-time items is a more representative view of our run rate growth for North America commercial PNC. Premiums in our very large middle market division increased almost 8%, an excellent result. PNC up over 10%, and financial lines down about 2%. Premiums in our major account and specialty division declined 1.7, and adjusting for the one-time transactions, they were up 3.1, 3.6 in PNC, and financial lines down 1. Major and specialty is comprised of E&S business, which was up 10.7, and our major account retail business, which was down 1.3. overall commercial pricing for property and casualty excluding thin lines and comp was up 8.3 percent with rates up 6.4 an exposure change of 1.8 going a step further property pricing was up 3-1 with rates down 0.7 offset by exposure change of 3.8 percent for property Pricing was down 9.6 in large account business, both admitted in E&S, and up 10.2 in middle and small, again, both admitted in E&S. Casualty pricing in North America was up 13.4%, with rates up 12.6 and exposure up 0.7. Financial lines pricing was down 3.2, that's all rate in comp primary comp pricing was flat while large account risk management was up seven and a half percent in north america commercial our selected loss cost trend was declined modestly from 6.8 and 24 to six and a half casualty running 8.9 and property four and a half percent we are mindful potential impact tariffs could have on short tail lines of business and are watching closely. On the consumer side of North America, our high net worth personal lines business had another very strong quarter with premium growth of 10.1 adjusted to the reinstatement premiums. New business growth was almost 20%. Premiums in our upper high net worth segments grew over 16%. Homeowner's pricing was up 12.5 in the quarter and ahead of loss costs, which are running 8.7. Turning to our international general insurance operations, premiums were up 1.8%, or 6.5 in constant dollar. The dollar was considerably stronger in the first quarter versus a year ago, but has substantially declined in value versus major currencies in recent weeks. In the quarter, international commercial lines grew about 7.5%. Consumer was up 5%. From a region of the world perspective, Asia and Latin America both grew 6.1%, while Europe grew 5.5%, including growth of 6% on the continent, while premiums in our London wholesale business were up nearly 8%. In our international retail commercial business, P&C pricing was up 2.6% and financial lines pricing was down 5.5%. Loss cost trends in international retail were in fact down 80 basis points from 24%, 5.8% to 5%. Our global reinsurance business had a strong quarter with premium growth of 14%. In our international life insurance business, which is fundamentally Asia, premiums and deposits were up 15.5% in constant dollar. And in combined insurance company, our U.S. worksite business grew 18.6%. Our life division produced over $290 million of pre-tax income in the quarter, up 15.7% in constant dollar. In summary, we are in the risk business. Volatility is a feature. While we are impacted by the wildfires, our underlying fundamentals are excellent. We had a good quarter. And as I observed at the beginning of the year, about 80% of our global PNC business, commercial and consumer, and our life business, very good growth prospects. In fact, When you listen as I read to you and describe going across divisions, the growth rate of the various businesses, FX aside, I think that speaks to the broad nature and the 80% I'm talking about. There is a lot of opportunity and I'm mindful that the external environment has become more uncertain. I have confidence in what we can control In that regard, in our ability to continue growing operating and earnings and EPFs at a double-digit rate, that's an FX notwithstanding. I'm going to turn the call over to Peter, and then we're going to come back and take questions. Good morning. Our strong first quarter results were supported by exceptional balance sheet strength and liquidity. Book value, nasty. to $2.3 billion. The quarter produced adjusted operating cash flow of $2 billion, including approximately $600 million of net loss payments for California wildfires. In the quarter, we returned $751 million of capital to shareholders, including $385 million in share repurchases and $366 million in dividends. The average share price on our repurchases for the quarter was $286.18. Book value for the quarter was favorably impacted by unrealized mark-to-market gains on our high-quality fixed income portfolio due to declining interest rates. Book and tangible book value per share excluding AOCI grew 0.9% and 1.6% respectively for the quarter. As you know, rates have since backed up. Our core operating return on tangible equity for the quarter is 13%, while our core operating ROE for the quarter was 8.6%. The quarter included pre-tax catastrophe losses of $1.64 billion, excluding the California wildfires. The approximately $170 million balance was principally weather-related, split 74% U.S. and 26% internationally. Prior period development in the quarter in our active companies was a favorable $268 million pre-tax, with favorable development of $313 million in short-tail lines, a mix of commercial and consumer. an unfavorable development of $45 million in long-tail commercial lines. Turning to investments, our A-rated portfolio produced adjusted net investment income of $1.67 billion, which was at the lower end of our six-month guidance and was negatively impacted by approximately $25 million of lower-than-usual private equity distributions and realizations and $10 million of unfavorable FX movements. The income generated from our public fixed income, private credit, and strategic holdings portfolio is performed in line with expectations. While the direction of financial markets remain uncertain and volatile, we expect second quarter adjusted net investment income to be at the midpoint of our previously guided six-month guidance. Our pay to incurred ratio for the quarter was 87% or 86% excluding tax, PPD, and agriculture. Our core effective tax rate was We continue to expect our annual core operating effective tax rate to be in the range of 19 to 19.5%. I'll now turn the call back over to Karen.

Thank you. At this point, we're happy to take the questions.

Ladies and gentlemen, at this time, we'll begin the question and answer session. If you'd like to ask a question, please put the bar followed by the number one on your telephone keypad. Your first question comes from the line of Gregory Peters with Raymond James. Please go ahead.

Okay, good morning, everyone. So, Evan, in your comments, recognize your 80% growth.

Hey, Greg, could you start again? Wait, wait. You garbled in the beginning. We didn't get it. Got it.

Good morning, everyone. Did you hear that okay? Yeah, I got it. All right. So, in your comments, Evan, you talked about the 80% of the business and the growth outlook. You know, the tariffs are an issue, potential for increasing inflationary pressures. You called out the risk of recession. And frankly, it feels like there's increasing price competition in many lines of property casualty insurance, you know, both in North America and globally. So with all of that, how are you thinking about the growth strategy for the company, both inside and outside the U.S.?

Yeah. There's no change to our strategy. Our strategy is enduring. We see growth opportunities that sometimes you get more joy for the pleasure, depending on market conditions. Sometimes you get less. That hasn't changed the opportunities. And I think as I just went through for you, it's steady with, and I'll put a point on it, from what we talked about at year-end, we talked about at investor dinners, what my shareholder letter speaks to, middle market and small business globally for us, growth opportunities. It varies. That's a big space. And we have our own unique strategies to pursue that opportunity. And it is a global opportunity, again. E&S and the U.S., which, again, frankly, is the theme of small commercial and middle market commercial. Our personal lines business in the US, our consumer business overseas. And then of course there are areas of large account business that continue to show good growth opportunity right now to us. And some of that is more tactical and some of it is more strategic. Yes, property is growing and everything I've had to say is is is contemplating the underwriting environment as we see it um which is not the directionally not a surprise to us when we've been talking about it property growing more competitive in large account whether it's ens or admitted middle market property and small remains um more disciplined that way, and casualty businesses responding to lost cost environment. And then you add to all of it the things we've been doing to improve job in terms of our presence geographically, in terms of how we approach segments of business in terms of industries that we have an expertise or focus on. Think of Climate Plus right now. Think of lines of business like cyber. And then you think of our technology and what we've done that way and our use of data that allows us to access more customers, depending on geography, and to partner with different forms of distribution to reach customer segments, whether it's middle market in Asia or it's automobile in Mexico. More frankly, it's pet insurance in the United States. And I could go on. Thank you for the question.

Thank you for the details. I have a follow-up. It's going to go in one direction, but then you brought up technology. And, you know, for us on the outside, when we ask you about technology, you know, we'll get a couple sentence answer, but it's really hard for us to figure out what's really going on and what's sort of maintenance technology spend versus what's game changing. In your annual report, you put a technology sort of theme on the cover. So maybe you can spend a minute and give us some additional commentary on the technology piece as part of your first answer.

Yeah, and understand you're at a place where you make the comment, it's hard for you guys to figure out what's going on. I got it. And we have no intention of being more transparent than we are. I've said before, we spend, you know, Over a billion dollars, it's about 1.1, 1.2 billion on technology. Roughly half is maintenance and managing what we got, 50, 55% of it. And the balance is development of all kinds, whether it's legacy, more what you think of as legacy modernized to provide straight through processing, whether it is technology around the use of data to improve analytics, to improve our AI capabilities, to supplement what humans do or replace what humans do or improve our insight, whether it's technology that allows us to connect to both customer and distribution partners in an efficient way, whether it's technology and how it's used that speeds up our cycle times of change. We're just far up the road in this. And technology helps to maintain what is the best expense ratio in the industry, and over time, even lower that expense ratio. So thanks a lot, Greg.

There was actually some useful information in that answer, so thanks for your time.

There you go. I just kept it at a certain level. I can't give a roadmap to everyone else who would like one from us.

Makes sense.

Thanks a lot.

The next question comes from the line of Mike Zuremski with BMO Capital Markets. Please go ahead.

Hey, thanks. Good morning. In regards to the outlook commentary you made, Evan, about continue to expect operating income, EPS, to grow at a double-digit rate, and I think you were saying X catastrophes and FX. I'm curious if you can kind of give us a flavor of what you think catastrophe inflation is. I guess we can obviously see in our models, you know, cat losses for you all and others. um and i feel like chubb's cat loss has actually been better than expected but still you know elevated for the industry so any sense of kind of how chubb is thinking about weather loss and inflation and whether you're able to keeping up or or or not thanks yeah mike um on inflation i gave you um

and put out their loss cost trends that we are using, and that is proxy. I don't have a crystal ball, and I cannot prognosticate where inflation actually goes from here in terms of rate and to which goods and products. It's any increase in inflation is fundamentally tariff related. And that's a moving target and a chaotic picture at the moment. And it's the kind of thing that we can stay on top of if we're watching early data around goods and around labor costs. have to do with physical property construction, reconstruction, infrastructure, et cetera. So, you know, that part we're keeping our eye on, but I gave you some sense of inflation. On FX, we have no idea. It bounces around. It's ephemeral. The direction of travel and if policies continue is a weaker dollar. When it comes to catastrophes, well, you're asking me a crystal ball view. There is a natural volatility. Talk about it all the time, but a round cap. You're never going to hit what you price for exactly, which is what the AALs are. and what you're expected is in a quarter it's either above it it's below it um you know it it moves around and whether one year is going to is going to be heavier than you know the year before which for us was lighter last year and the year before that um um you know who knows um I don't do any hand-wringing about it, and we're not. And we update, which is more important to us, we update our view around cats by peril on an ongoing basis as additional data comes in and we have more insight. And that allows us to ensure that the way we're pricing for risk and our accumulation appetite around cat perils by geography are within what we'd imagine and contemplate. That's how we run the business. And volatility quarter to quarter, that's not our obsession.

Understood. That's helpful. Just switching gears quickly.

By the way, I gave you all that as an answer, but we don't give guidance.

I mean, understood, as you know, that, you know, we tend to look at recent catloads and update future catloads, you know, taking the new average. So, but switching gears real quick.

I've never found the kind of consensus which is an aggregation of different analysts work. I've never found it, um, you know, something other than reasonably rational to me. Um, I don't look at point estimates. I look at the trend of it in the relative neighborhood of quantum and, you know, I've never found it anything but rational.

Okay. I understood. I feel like maybe back in the day there was a, view of your cat load in the proxy but i can't remember if that's that that was removed or still there but um just switching gears real quick to you know i think much of our incoming from investors is focused on uh north america commercials social inflation um reserve releases very strong uh this quarter um you know any any comments on kind of the environment i know you gave us the uh update on on what you felt your lost cost inflation was but any Any commentary on puts and takes on reserve releases or even the underlying loss ratio was excellent and improved this quarter? Thanks.

No, the only thing I will say for those who are obsessed simply about North America, it's a large part of our business, but it really just misses the story of Chubb and who we are. global nature of the business outside of the United States is not some gray mass that just is a thing out there it's 54 countries in vital regions of the world and you look at the growth and you look at the quantum and you look at the contribution to simply obsess about North America and North America lost costs I think actually does investors a disservice, but I leave it to those to do their job as they think they ought to. On the reserve releases, we review, again, a cohort of portfolios, a different cohort each quarter. and update our view of development. This quarter is generally a smaller quarter in what we review on both the property and the casualty side of the business. And so this was just an amalgamation of those various long tail lines, smaller portfolios, admitted and ENS, and property the same, physical lines. Thank you. You're welcome.

Your next question comes from the line of Brian Meredith with EBS. Please go ahead.

Hey, good morning, Evan. First question, I believe your Global Property Cat Reinsurance Program renewed on April the 1st. Any kind of changes that we should be thinking about there, cost, retentions, et cetera?

Yes, sir.

Okay. So fairly similar to what is kind of laid out in the 10K right now. Exactly. Perfect. Thank you. And then the second question is something I've been getting from some investors. I'm just curious, how do you think about allocating capital into areas that maybe the kind of political kind of environment right now is a little more contentious or maybe more than a little more contentious areas like China? How do you think about that right now? As far as your capital allocation decisions.

Well, um, the world is, I have noticed, um, and, um, you know, our capital allocation, you see that we made acquisition, you know, of a modest nature and Southeast Asia. continued leaning in that way. I think it's a metaphor for the notion that it's steady as she goes. China, U.S. aside, the balance of the world, you know, there's always going to be a certain amount of volatility. And as a multinational, you know that. We're mindful. of the increased volatility that is occurring as a result of, in particular, our administration's approach to foreign policy and trade as it's emerging. And that keeps us mindful. We'll be thoughtful, we'll be prudent, but our strategy is our strategy. We're not short-term investors. We're long-term investors. What we invest in a country is permanent. And we participate in the economic and social development in those countries. And that is, whether it is the United States or it is Thailand, we are participants in that. And some have more volatility than others do. In a word, it's steady as it goes for us. When it comes to China, which I think is on people's minds in particular, we're not actually investing any additional capital and haven't been for a bit of time. And I don't foresee additional capital investment in China. Our exposure is our exposure.

Thank you.

And by the way, the money doesn't burn a hole in our pocket. How are we allocating capital? We're allocating it for growth in our business where it occurs. we're allocating capital for investments. And right now, we're earning 5.5% north of that in our investment portfolio. That seems like a pretty darn good bet to me, and I'll put as much as I can into that.

Thanks.

The next question comes from the line of David Motamadn with EveryCore ISI. Please go ahead.

Good morning. Just a question. It definitely sounds like a tale of two cities on the property side with still the small and middle market remaining healthy, but definitely some areas of competition picking up in large account in E&S. I'm wondering if you can help me think through just your view, Evan, if you think um sort of that competition that we're seeing in the large account ens market is sort of a sign of what's to come in the small and middle market or um is there is there something structural that's different between those two different markets that we should think about where um you know the the pricing in the middle market and small market is more durable on on the property side so david

It's always been structurally different. That's the point. Large account business is brokerage driven. You don't need a lot of physical presence. You need not a lot of capability as a company. You need capacity. You need some underwriters. You can participate in the capacity play, large account business. Welcome to a lot of E&S. Welcome to London open market. Welcome to large companies, companies that engage in large account business and have just a few urban locations to do it at. Now, being the lead on those accounts, issuing the paper, managing the claims, doing the engineering, well, that starts to separate and how you participate. But think about shared and layered large account business. It's a capacity play for most of it up and down the chain. So you come and you put a blind out. Middle market, small commercial insurance is widely distributed. Thousands of producers and agents, small average premiums. They typically don't buy one line from you. They buy multiple lines from you. You've got to have presence. You've got to have a lot of capability. to support the development of that kind of business. Yeah, on the fringes, there are ends of it. It gets boxed up by a few brokers and they bring it in a facilitized way. But the vast majority of the market is now you're talking about broad geographic reach, local reach, local capability, multi-line. claims capability, engineering capability in a broadly distributed way. David, welcome back to you, Matt.

I appreciate that. I guess my mental model, I've always thought large account, more cyclical. sort of leads the middle market by a year or so.

That's right. That's why.

Yeah. Yeah, okay.

You asked the question structural. It was a good word, so I focused on the word structural.

Great. Thank you. And then just as a follow-up, you know, within – within the overseas general business, I noticed, uh, the Europe growth, uh, ticked up a little bit, um, probably too early to see any signs of any sort of fiscal spend over there resulting in, uh, in an uptick in growth. But I'm wondering if, you know, how you're thinking about that, um, and, you know, having that exposure, how that positions you relative, uh, you know, to the U S market, given all the headwinds that you sort of called out.

Yeah. Are you thinking, um, Are you thinking, um, um, economic outlook for those regions?

Yeah. And, uh, economic with, with like the, the fiscal spending and, and what that might do, um, you know, to sort of boost growth over there relative to some of the, you know, potential weakness, um, that might be coming in the U S. Yeah.

Um, you know, we, we have the pleasure in the United States, um, and we ought to really cherish it, of being the reserve currency of the world, which gives us a borrowing capability. It certainly doesn't give any other region or country of the world, and let's be careful how we abuse that, or we won't have that privilege. Others are more constrained in their ability to use fiscal stimulus. Europe, there'll be more fiscal stimulus. It'll be both in the security end and maybe in certain industries, um, as the Europeans are determined to stand on their own, to feed, be more independent of that. And, um, and the key is Germany and they're unlocking the door to much more fiscal, which will support economic growth. No. All over the world, the theme in our mind is that whatever we thought economic growth was going to be six months ago, to state the obvious, that number has come down. What it'll actually be, we don't know, and it'll vary by region. Asia will be impacted. Consumers in Asia will be impacted. domestic industries will be impacted um how much is is a question mark because the fact set is not clear to us yet um but for job it'll be steady as it goes it means that you know growth could be could be better growth could be a little worse don't know um and all that We had in mind when I said I am confident and remain confident in our ability to grow earnings and EPS at a double-digit rate and are thinking about what could be volatility around growth notwithstanding. That won't have a significant impact on it at this time.

Am I making sense to you? Yep. Yep. No, it makes sense. Thank you.

Your next question comes from the line of Meyer Shields with KBW. Please go ahead.

Great. Thanks so much and good morning. Evan, I was hoping you could take us maybe a level deeper in the judgment behind lowering loss trends in the quarter.

I'm not going any deeper. I'm not going to put out more numbers than I just gave you. I think it stands on its own and is informative, Meyer. What can I help you with? What would you like to know?

So I guess the question that I'm seeing a lot is that the outside that social inflation is running rampant and there's a risk of tariffs, which all those equal, I guess, would argue for a higher assumed loss trend rather than coming down a little.

Yeah. The, the, when you measure it up against where we were casualty, we're talking by the way, it's all the right side of the dust. So let's start with that. Um, And on the casualty side, given the blend of business, the loss cost trend in aggregate and long tail is up modestly, you know, hence the basis points. And on the physical side, given the mix of business and what we see, it's down, you I want to say, you know, from memory, 83% approximately. So, you know, we're not talking much. And on the physical side, look, I know what our pegs contemplate for lost costs. We're mindful of tariff. and we will see as we go forward at the moment we we set our pegs conservatively and therefore we don't see a need to adjust track okay that is perfect that's exactly what i was looking for um second unrelated question i guess one potential impact of tariffs is that there's less demand for

crops and thinking of soybeans going to China. What can you do with the North American agriculture to ameliorate that impact on this year's underwriting results?

Yeah, right now, if I understand your question, when I look at the, we look at the major crops. So, you know, let's take corn and soybeans. That's the majority of it. We priced our contracts. We priced the contracts, the government formula sets it in February and you have a certain going in crop price, price insurance contracts. As you know, it's yield and price that are the exposure. And right now, actually corn and soybeans are within a few percentage points of the February pricing. There hadn't been much change. Beyond that, which I won't go into any detail on because it's proprietary, you know that like reinsurance, we use hedging to protect a certain degree of volatility. And let's just say we're mindful of that tool and um and we know how to employ them and i'm doing it okay that is helpful thank you so much you're welcome your next question comes from the line of alex scott with barclays please go ahead hey good morning

First one I had for you is on casualty. You know, just seeing the rate continue to accelerate, you know, loss trend also up a little bit. Is the price adequacy getting to the point where that's becoming a more interesting opportunity? I'd just be interested in, you know, your high-level thoughts on sort of the direction of that and, you know, how much more is needed before you, you know,

more interested in that is a big opportunity um you know i um i'll repeat what i said the casualty is getting great where it needs to get rate and whether it is large account or it's in the middle market we are growing our casualty exposure um and i'm going to leave it at that

Okay. The second one I have for you is on the reinsurance market. I know it's not a huge business for you and you don't necessarily lean in or lean out the way that some do, but I just wanted to understand how you're viewing that business, particularly headed into this renewal period and increased capacity that we're seeing in property more broadly.

know what what would you expect out of that market and you know is that you know does that still price adequate enough to be something you know you want to uh you want to be involved in um as a buyer of reinsurance um study as she goes and as a seller of reinsurance you see that we have grown this quarter it's more property than casualty related, though we see opportunities in both. Okay. Thank you. Thank you.

Your next question comes from the line of Robert Cox with Goldman Sachs. Please go ahead.

Hey, thanks for taking my question. I just wanted to circle back to the tariffs. Evan, you mentioned being mindful. of the impact tariffs could have on short tail lines. And, you know, it's clearly a moving target. Do you have any early sense of the magnitude of the loss trend impact? And, you know, I was also curious on how you're able to incorporate a moving target like that into your pricing strategy today, or is that still wait and see?

So, you know, you, you, you want to underwrite with facts. And you don't want to anticipate with conjecture unless you have clarity around your conjecture. Meaning, if you have 70 or 80 percent certainty, as an example, then we would take a certainty. It is a moving target. The administration has an objective to reach trade agreements over 90 days with a large number of countries. What will that mean in terms of tariffs go forward? It's unclear. We have a stated objective, just voiced, of negotiations with China. Knowing China, knowing the complexity of our trade relationship, that will be a protracted discussion. That would not be hard. Demand, if tariffs remain high, will be impacted. How will that impact inflation? There's uncertainty around all of that. Now, let's get to some math. When I think about property insurance today, and I think about the current accident here this year, Keep in mind, loss ratio develops on an earned basis. So a lot of it has already been written. It's already being earned. It's already in the can. There you go. As you go forward on a written basis, and as months go along, If we see a change in inflation, the markers that will in fact change inflation, we will adjust our pricing in that cohort. Go one step further. Imagine on the physical side how much comes from Mexico and Canada. As an example, as influence, what will happen in terms of tariffs in North America and in terms of USMCA negotiations? So on the claim side, all of this is on our minds as we measure the change of price of goods and of labor. And all of it is on our minds as we watch negotiations that will ultimately lead to a more steady and clear environment around what will tariff levels actually be and apply to what goods. And then there's a lag time.

Got it. Thank you for all those details. If I could ask a follow-up, I wanted to get a sense of your view of E&S market growth for Chubb. We've talked about more competition in E&S property, but there's also, it seems like, some secular tailwinds for the E&S market. Would you expect Chubb to continue to grow more in the E&S market versus admitted going forward?

But I just gave commentary that said we grew ENS at 10%. I explained the property market, the casualty market, and mixed in all of that. Our discipline and underwriting and what we see as opportunity, we grew ENS 10.1%. I also gave a sense of 80% of our business with growth opportunity. Go forward. So I'm going to leave it at that. Thank you very much.

I will now turn the call back over to Karen Beyer for closing remarks. Please go ahead.

Thank you, everyone, for joining us today. If you have any follow-up questions, we'll be around to take your call. Enjoy the day.

Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.