The CEO of the world’s largest property and casualty insurer has blasted brokers for “abusive behavior,” according to the Financial Times.
Evan Greenberg, chairman and CEO of Chubb, predicted that some broker practices would prompt a regulatory backlash. According to Greenberg, some brokers are demanding “excessive” commission terms – a “simply unsustainable” practice, he wrote.
“There will be customer and regulator backlash, or worse,” Greenberg wrote.
Greenberg’s prediction or regulatory backlash is reminiscent of a similar backlash more than a decade ago. Following an industry probe by then-New York Attorney General Eliot Spitzer, top brokers were banned from receiving certain types of commissions, according to the Financial Times. But smaller brokers were able to keep making those commissions, raising concerns about whether the ban was fair. Regulators agreed to ease the compliance regime for larger brokers in 2010.
As a result, the Financial Times reported, some kinds of commissions have started reappearing. In his annual letter to shareholders, Greenberg cautioned against “abusive behaviour on the part of some brokers who enrich themselves at the expense of both their customers and underwriters.”
“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,” Greenberg wrote.