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: Hannah Erin Long

The effect is the opposite.

Trump's proposed tariff policy has been considered likely to raise prices, and economists warn that his second signature policy - the plan to deport millions of illegal immigrants from the usa - may also drive up prices.

Economists believe that a large-scale deportation plan would disrupt industries that rely on immigrant labor, including agriculture and construction, leading to worker shortages, production slowdowns, and ultimately causing food, housing, and other commodities to become more expensive.

Neil Shearing, chief economist at Capital Economics, wrote in a report on Monday (November 18) that 'tariffs are not truly the threat; other countries and regions will pay attention to the impact of Trump's trade policy during his second term, but what will really hit the usa economy is Trump's stance on immigration issues.'

What impact will Trump's large-scale deportation plan have on the usa economy?

Trump previously stated that he would deport millions of illegal immigrants living across the usa based on the Alien Enemies Act passed in 1798.

Trump said his plan would involve at most 15 million or 20 million people, however, according to data from the Center for Migration Studies, as of July 2023, there were only about 12 million undocumented immigrants in the usa.

The year with the highest number of expulsions in a single year was approximately 0.43 million people in 2013 during Obama's presidency.

Research shows that undocumented immigrants make up slightly less than 5% of the labor force in the usa, however, if they are deported, many other workers would also be affected.

Chloe East, an economist at the University of Colorado Denver, studied the impact of deportation actions during the Obama and Bush administrations on the labor market in the usa. Her research found that for every 0.5 million undocumented immigrants who leave the labor market, job opportunities for americans decrease by 0.04 million.

East said this is because when undocumented immigrants are excluded from the labor market, it becomes difficult for employers in the construction, agriculture, hospitality, and childcare industries to fill low-wage, less attractive positions, resulting in a decrease in demand for other types of positions.

East said, "Large-scale deportations will worsen the employment situation for ordinary americans."

Some supporters of reducing the number of immigrants have countered the argument that "employers have difficulty finding american workers to fill low-wage positions usually held by foreign workers", but East pointed out that in her study, "we did not see any evidence that employers could attract american-born workers to those positions."

In the past year, a wave of new immigrants has driven job growth in the usa, and despite high interest rates potentially slowing hiring and pushing up unemployment rates, the job market in the usa continues to maintain strong growth momentum.

Madeline Zavodny, an economist studying immigration-related economic issues at the University of North Florida, said: "Without these immigrants, there would not be such growth in the usa's job market."

Zavodny pointed out that the influx of immigrants – including legal and illegal immigrants – has alleviated the labor shortage in the usa in recent years and has prevented further increases in prices. She stated: "Without these immigrants, the pressure on prices in the usa would be greater."

What are the potential benefits of mass deportation?

Some policy experts believe that the vacancies left by mass deportation will go to working-age americans who need jobs – including men of working age without college degrees, whose labor force participation rate has been declining for decades.

Steven Camarota, the research director at the anti-immigration think tank Center for Immigration Studies, said: "Employers will have to raise wages and change their hiring practices in hopes that more of these men will find work."

Additionally, Camarota does not believe that mass deportation will significantly disrupt the usa's large labor market.

He said: "The labor force in the usa is 0.168 billion, and I don't think that removing millions of illegal immigrants will have much impact; there are always people coming and going in the labor market."

Will Trump's mass deportation plan lead to rising prices?

However, an increasing number of economists are issuing opposite warnings, stating that Trump's immigration plan is highly destructive and will further raise the prices of consumer necessities that have already caused stress for many people in the usa.

If too many workers are lost in industries such as agriculture and construction, farmers and residential builders will struggle to maintain production. Some affected industries, including agriculture and childcare, have already begun to address labor shortages.

Easter said that the loss of labor could drive up prices for groceries, housing, and daycare services. If there is a significant reduction in agricultural and construction workers, food prices will rise, and housing prices will also increase.

A paper published by the Peterson Institute for International Economics in September pointed out that large-scale deportations "will trigger a typical supply shock, leading to rising prices and declining output."

Some experts believe that these industries may not be significantly affected. Adam Speck, an agricultural economist at data analysis firm Croptell, thinks that labor shortages are not one of the biggest risks facing Trump's new administration.

In the agriculture sector, the H-2A visa program allows farmers to temporarily hire foreign workers. Speck noted that expanding this program could offset the impacts of the immigration deportation plan.

Spike said, "Trump knows he needs to build a good relationship with farmers."

The impact of Trump's immigration agenda will depend on how effectively the government implements his plans.

Trump promised to initiate deportation plans on his first day as president, but an analysis report by the American Immigration Council shows that the current immigration enforcement system lacks the capacity for such large-scale actions, which could cost hundreds of billions of dollars to implement. The American Immigration Council is a non-profit advocacy organization opposed to mass deportation.

On Monday, Trump posted on Truth Social that he would declare a state of emergency and deploy the military for deportations.

If Trump really did this, his immigration policy would be the largest of its kind in decades, but Zawoni said this would not help Trump fulfill his promise to lower prices.

She said, "Deporting a large number of immigrants will not lower prices, I hope more people understand this."

Editor/Rocky