Chubb Ltd’s use of artificial intelligence technology is growing, and it will begin rolling out AI tools on a large scale, the insurer’s top executive said on Wednesday while discussing the company’s first-quarter results.
“We have a variety of use cases that have emerged and we continue to iterate with that,” Evan G. Greenberg, Chubb’s chairman and CEO, said Wednesday morning on an earnings call with analysts.
Chubb has been experimenting with deep learning and math-based AI tools for five years in various business areas, including underwriting, claims, analytics, marketing and customer service, Greenberg said.
“It will not replace our highly qualified knowledge workers. It won̵7;t do it for a while, but it certainly improves their capabilities. We are at the beginning of a period where we use these tools on a large scale, he says.
Chubb reported on Tuesday after markets closed first-quarter net income of $1.89 billion, down 3.2% from $1.95 billion in the year-ago period, as premium growth was offset by higher catastrophe losses.
Catastrophe losses before tax for the first quarter were $458 million, compared to $333 million in the same period last year.
Winter storms and other severe weather events in the United States accounted for 76% of catastrophe losses, with storms in New Zealand and Australia accounting for much of the rest, the insurer’s top executives said on the earnings call.
Chubb’s total expense ratio was 86.3%, compared to 84.3% last year.
Group net premium income was $10.71 billion, up 16.6% from Q1 2022. Property/casualty net premium income increased 9.3% to $9.42 billion, with an 11.5% increase for commercial supply.
North America net premium income increased 11.3%, with growth of 11.7% in commercial lines.
Net investment income before taxes was a record $1.11 billion, up 34.7%.
Growth was balanced and broad-based with double-digit increases in North America, Europe and Asia, Greenberg said.
In North America, both property/casualty rate and rate increases accelerated again in the quarter with commercial property/casualty pricing increasing 11.2%, Chubb said.
Pricing for commercial property and casualty excluding financial lines and workers compensation rose 16.9%, Greenberg said. Property prices rose 27%, while casualty pricing rose 9.9%, he said.
For professional lines and workers, including risk management, “the competitive environment is aggressive and prices have continued to decline in recognition of favorable experience,” he said.
Rates and pricing for North America’s financial lines overall fell about 2% in the quarter, while laborer rates rose 6.4%, he said.
In Chubb’s international retail business, the price rose by about 8%.
“We had an excellent quarter, a strong start to the year with a lot of momentum heading into the second quarter. Looking ahead, we are confident in our ability to continue to grow revenue and operating profit,” said Mr. Greenberg.