Chubb is an underwriting company and we strive to emphasise the quality of underwriting rather than volume of business or market share. Our underwriting strategy is to manage risk by employing consistent, disciplined pricing and risk selection. There are clearly defined underwriting authorities, standards and guidelines, coupled with a strong underwriting audit function in place across our various product lines locally, which is in turn driven and monitored by the Chubb Group. We’re focused on adherence to criteria for risk selection by maintaining high levels of experience and expertise in our underwriting staff, with strong support from our Asia Pacific region and International network of expertise within the Chubb Group. We also employ a business review structure that helps ensure control of risk quality and conservative use of policy limits and terms and conditions. The actuaries within the Chubb Group work closely with the Company’s underwriting teams to provide additional expertise in the underwriting process.
As part of our risk management strategy, we also purchase reinsurance as a tool to diversify risk and limit the net loss exposure – including catastrophes – to a level consistent with our risk appetite. In line with the Chubb Group’s policy, reinsurer selection is selected based upon the its financial strength, claims settlement record, management, line of business expertise, and its price for assuming the risk transferred. The Chubb Group maintains a Chubb-authorised reinsurer list that stratifies these authorised reinsurers by classes of business and acceptable limits. In addition, there’s a formal exception process that allows authorised reinsurance buyers to use reinsurers already on the authorised list for higher limits or different lines of business or other reinsurers not on the authorised list – if there are compelling business reasons.
Quantitative information on the concentration of insurance risk by territory, by major lines of business before and after reinsurance and further information on insurance risk management can be found in Note 21(f) of the Financial Statements here.