Chubb Limited (NYSE:CB) Q2 2019 Earnings Conference Call - Final Transcript
Jul 24, 2019 • 08:30 am ET
also -- just going back, I guess, to some of your comments to the previous question on just what you're seeing with loss trend. Are you guys seeing any changes in the TOD environment? And I know there's a lot of different classes that blends together, but that 4.5% of trend that you said in the book for North America commercial, can you give us some perspective on how that would compare? And maybe it's not number. Is this more qualitatively to what you've seen in some recent quarters?
Evan G. Greenberg
Sure. Elyse, in the aggregate, in the round, the loss cost trend is stable. We haven't seen a change in it. As you rightfully note though within that, it varies by class of business and area of business. We've talked for a number of quarters for quite some time now about professional lines, D&O in particular and I won't repeat or go into what we've talked about, but -- simply about the increase in frequency, and in some areas, severity in that.
You know in the TOD environment, generally there has been less of an increase of frequency, but there have been headlines of increase in severity, jury awards, cases and you see it from commercial auto to product's liability that is chemical related. And then the trend from -- toward from "#MeToo" and molestation and the specter in the future of the reviver statutes, which is unknowable at the time. So there is -- and then, the Australian market behaves a certain way and toward -- and the London market, the U.K. where D&O had deteriorated.
So you have -- it varies by area and by class of business. Comp on the other hand behave very well. General liability behaves in a steady way, reasonably steady. So I hope that helps you.
Yes. That's helpful. And then on -- you said kind of talking through the core margin within North America commercial that the delta between this Q2 and last Q2 is really just due to rate versus trend. You seem, in your comments this quarter and also last quarter, pretty bullish on pricing and the fact that you would think it would continue. So do you think we're reaching the point where -- obviously, it takes a while to earning the rate. But if you keep getting this rate and accelerates, do you think as we get into 2020, you can think about that being an environment where there will be some core margin improvement?
Evan G. Greenberg
We're in the risk business, so I can project the numerator reasonably well to you. I can't project and prognosticate the denominator -- the denominator I can project, I can't quite project the numerator the same way to you because we are in a risk business. And -- so -- look, rate exceeding trend is a simple statement. It's an ameliorating factor and that's a good thing. We'll see what its impact is on margin in the future. Okay, thank you. And then one