Source: Barron's Chinese Author: Nicholas Jaskinski Evan Greenberg, CEO of Chubb Ltd, has a highly influential fan - Warren Buffet, CEO of Berkshire Hathaway. Berkshire Hathaway disclosed last month that it held 6% of the shares in Chubb, one of the world's largest insurance companies, by the end of 2023. Berkshire itself is a major participant in the insurance industry, but it is not the only buyer. In the past year, Chubb's stock return, including dividends, was about 40%, surpassing the S&P 500 index's total return of 25%, and making the company's market capitalization reach $110 billion. This increase in market capitalization reflects Chubb's outstanding performance, which is attributed to its prudent underwriting practices and conservative management of its investment portfolio of about $140 billion. The company's earnings per share increased by 48% in 2023 and its book value per share increased by 21%. Greenberg is the son of Maurice "Hank" Greenberg, the former CEO of American International Group (AIG). Greenberg worked at AIG for 25 years, rising through the ranks. He left the insurance company in 2000 and took over Ace Limited in 2004. The company merged with Chubb in 2016, the largest M&A in the property and casualty insurance industry at the time. Today, Chubb is the largest commercial insurance provider in the United States, and the company is also known for its high-end homeowner insurance for the wealthy. However, about half of the company's premiums last year came from outside the United States. Asia has always been a growth area where the company is bullish: Although Asia accounts for 40% of global GDP, the insurance industry accounts for only 26% of the global insurance market share. This gap is expected to narrow over time. Greenberg sits on the board of several nonprofits that focus on international and Asian affairs. Barron's recently interviewed Greenberg about his underwriting philosophy, the challenges of dealing with increasingly frequent climate disasters, and US-China relations. Following are the edited excerpts of the conversation.

Author: Kenneth G. Plingel

$Boeing (BA.US)$ Company founder William E. Boeing once angrily said when he saw worn cables on a Boeing aircraft that he would rather 'shut down than deliver aircraft of this quality.'

Kelly Ortberg, the current CEO of Boeing who took office on August 8th this year, inherited a company with many problems that can be described as 'cable wear'. Currently, there are increasing doubts about the future of Boeing.

This year, Boeing has experienced incidents such as the cabin door detachment after takeoff of the 737 MAX 9 aircraft and a malfunction in the 'Starliner' spacecraft that trapped two astronauts in space. Troubles continue as Boeing recently failed to reach a labor agreement with its largest union. Analysts say that Boeing is losing hundreds of millions of dollars weekly due to worker strikes halting production.

By 2024, Boeing's stock price has fallen by 40%. With a debt of $45 billion and lingering safety concerns, the closure of factories is undoubtedly the last straw.

In 1916, Seattle lumber merchant William E. Boeing founded Boeing company with a handmade seaplane. The Boeing B-17 bomber became a classic weapon in World War II, and the Boeing 747 epitomized American luxury, with safety-conscious passengers often saying: 'If it's not a Boeing, I'm not flying.'

Nowadays, Boeing company is facing difficulties.

The dream of human flight can be traced back to at least ancient Greek mythology with Icarus. In 1903, when the Wright Flyer flew over the sand dunes near Kitty Hawk, North Carolina, the dream of human flight became a reality.

In the subsequent aviation boom, William E. Boeing participated in the first American aviation show in 1910, captivating large crowds with the miracles staged in the sky.

A pilot said to William E. Boeing: 'Most of them have come to see crashes.'

After obtaining a pilot's license and buying an airplane, William E. Boeing had an idea. He said to a colleague: 'We can build a better airplane ourselves, and build it faster.'

On June 15, 1916, William E. Boeing flew on a wooden seaplane named Bluebill from Union Bay in Seattle, and a new company was born.

After the United States declared war on Germany in April 1917, Boeing company obtained its first government contract, with the U.S. government purchasing 50 Boeing airplanes. This marked the beginning of a long and fruitful relationship where safety was an indispensable part of their cooperation. In 1921, the U.S. Army established the first on-site inspection office at Boeing.

Historian Janet A. McDonnell wrote: 'The entire process from design to final acceptance has undergone quality inspections, including materials and processes.'

In 1927, Boeing Company won the profitable Chicago-San Francisco airmail route, carrying 36% of the mail in the USA. The Wall Street Journal reported that in five months, Boeing aircraft 'flew 72,000 miles without a single accident.' 'Safety' became synonymous with Boeing and a marketing tool.

On June 19, 1928, Boeing Company placed an advertisement in The Seattle Star: 'Travel with the mail. Boeing airplanes are as safe and reliable as military aircraft.'

Meanwhile, William E. Boeing began looking for acquisition targets. He acquired companies like Pratt & Whitney, Northrop, and Sikorsky, integrating them into a behemoth involved in all aspects of aviation.

On December 16, 1928, The New York Times wrote: 'Mr. Boeing said that the integration will drive the expansion of the aviation passenger business and achieve comprehensive unity of aviation activities under centralized control.'

William E. Boeing saw centralized control, while others saw monopoly and price fraud. Like John D. Rockefeller's Standard Oil, Boeing was also split up due to anti-monopoly laws. Disappointed, William E. Boeing sold his shares and left the company. Despite being limited to manufacturing after the split, the Boeing company thrived during wartime, reaching new heights.

On April 13, 1942, Barron's wrote: 'Boeing said that since the Pearl Harbor incident, the production of long-range heavy bombers doubled, believed to be the reason for destroying most of Japan's ships and fighter planes.'

Boeing joined other American aircraft manufacturers - including McDonnell and Douglas, which were not yet merged at the time - in producing 0.3 million military aircraft during World War II, compared to Germany's 0.1 million. The post-war airspace was dominated by Douglas until the Boeing 707 ushered in the era of jet airliners in 1954.

However, according to the information from the Museum of Flight in Seattle, the iconic 747 jumbo jet introduced in 1970, which revolutionized aviation travel, changed people's perceptions of air travel.

Projects like the Space Shuttle and the B-2 stealth bomber, which collaborated with the US government, are still ongoing. However, by the end of the 20th century, Boeing began to feel pressure from new rivals like lockheed martin and Airbus.$Lockheed Martin (LMT.US)$Airbus and the European Aeronautic Defence and Space Company (EADS) were mentioned in cooperation with the US government in the information provided. $AIRBUS SE (EADSY.US)$ faced pressure from new competitors lockheed martin and Airbus.

On December 16, 1996, The Wall Street Journal reported that Boeing acquired McDonnell Douglas for $13.3 billion, creating a global giant that united the world's largest commercial aircraft manufacturer with a military aircraft powerhouse.

The Wall Street Journal reported the challenges faced by Boeing in integrating McDonnell Douglas into its culture and in dealing with its CEO, Harry Stonecipher, the next day. Boeing executives referred to Stonecipher as "a good salesman".

Today, the merger is considered by many to be the root cause of Boeing's current issues, whether it is the escalating debt or the 737 Max crash. Critics say that Boeing has treated safety as a sacrificial lamb for profits.

Former Boeing COO and CEO Stonecipher's perspective differs. In an interview with the Chicago Tribune on February 29, 2004, he said: "Some say I changed Boeing's culture, that's my intention. I did this to make Boeing's operations more like a business, not just a great engineering company. Boeing is indeed a great engineering company, but people invest in a company because they want to make money."

Today's Boeing is neither a great engineering company nor a good investment. As the latest successor of William E. Boeing and Stonefield, Otberg needs to address many "cable wear" issues.

Editor/Rocky