Mike Zaremski: Great. Switching gears, maybe a quicker question on personal lines. If I look at what Chubb has said about lost cost inflation and personal lines, and I appreciate you have a different book than the average of your peers, but you all have been talking about close to double-digit or double-digit lost cost inflation for many years now. It feels like some of your peers have caught up to you in terms of, I think, they were underestimating it. I’m curious if you provide any context. Is the lost cost inflation more so coming from weather inflation, or is it just as much coming from wage inflation, or just any context unpacking that 10%, 10.5% lost inflation? Thanks.
Evan Greenberg: Yeah. It comes from three sources, or a couple of sources. It comes from frequency of loss, and from various perils. It comes from, and so there you could think weather-related. You could also think water-related, and so the infrastructure impact to housing stock itself. It comes from wage inflation, and it comes from materials, which remember, we ensure not the average homeowner. We’re ensuring those who are more affluent. And our product is a richer product in terms of how it responds to loss, and the position it places you back in following loss. We try to duplicate exactly what you had before the loss. Not sort of like it, but we duplicate it. That has an inherent inflation to it as well. And we ensure more complex properties, and we ensure more complex and expensive content.
So that may contribute to a degree, to a greater amount of inflation than you might see generally across, but we stay on top of it. And we have, and we’ve stayed on top of it in terms of both pricing and the amount of coverage we give to our clients, so they don’t fall behind, which for all our homeowners and stewards, that shows up, yes, in your bill that you get once a year from us, me included.
Operator: The next question comes from the line of Gregory Peters with Raymond James. Please go ahead.
Gregory Peters: Well, good morning, everyone. So thanks for all your comments. When I was looking through your results, I was particularly struck by the growth in the reinsurance lines. It seems to have accelerated, and I’m just curious if there’s a change in your perspective regarding leading into those market conditions.
Evan Greenberg: Yeah. Greg, keep in mind, percentages are a funny thing. It’s not a big business. It’s not a big book of business. We’re not a large reinsurer. So the percentage growth, which is very good to see, is off of a relatively small base. So in dollar terms, it’s nice. Thank you very much to all our Global Re colleagues, but it’s not a large amount. We allocated, given the pricing environment and given structure and given underlying pricing and structure of seasons portfolios, we allocated more incrementally, as I said in the opening, more CAT capacity to Global Re, which means they’re writing a bit more CAT access and a bit more property proportional and access per risk and it’s across the globe where they see favorable conditions. That’s predominantly what the credit is.
Q – Gregory Peters: Okay. Fair enough. I know I got to preview this question knowing that I’m probably not going to get a great answer, but I feel like it’s appropriate to ask.
Evan Greenberg: You can ask anyway and you’ll get a lousy answer, go ahead.
Gregory Peters: Well, the topic is M&A. I mean, you featured it. You talked about the 1 to 2 points of drag you get on holding excess capital. You mentioned that in your shareholder letter. You are generating great results. I feel like this is a time where we could see you get more active in the market, but maybe you can just talk to us broadly about what you are seeing in the market. Is there a pipeline out there? Is there a lot of opportunities or give us some perspective, if possible.
Evan Greenberg: Greg, I’m at rest. The results are terrific. We have excess capital for both risk and opportunity. It’s earning, putting money to work at over 6% right now. If you put the capital against our invested asset, it requires, its earning a damn good ROE. The cash that we hold is free to shareholder returns. We’re a global company with a lot of global opportunity and our eyes are always open. But as I said, I’m at rest. Don’t hold your breath.
Gregory Peters: Okay. I had to give it a shot. Thanks.
Evan Greenberg: Yeah, I guess.
Operator: Your next question comes from the line of Ryan Tunis with Autonomous. Please go ahead.
Ryan Tunis: Hey, thanks. Good morning. I guess first question, just on financial lines, I think you said that it’s quite frankly dumb. It’s obviously like a pretty broad set of various lines within financials. I think I heard you say that you are shrinking in mid-market too. It had been my perception that that was a little bit more disciplined than some of the major accounts. I’m just curious if you could just take us within financial lines, whether it’s account size or D&O, whatever. Where are folks acting more or less irrationally?
Evan Greenberg: Yeah. Look, the way to think about this, don’t just think – it behaves differently to a degree in major account than it does in middle market. In the cohorts that show up where market competition is irrational, I’m not going to unpack each one of those, but what I’ll break down for you is this. You have publicly traded D&O, and whether it’s in middle market or it’s in large account, there is dumb behavior, depending on the cohort, I’m not going to unpack which one of them it is, that much transparency. But you see it in large account, you see it in publicly traded D&O. There is not for profit D&O. We write it in both major accounts and we write it in middle market. And by the way, we write it in E&S. And there are cohorts where market, we know because we’re the largest writers of this business.
