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: Andrew Barry

According to a press release issued by Berkshire Hathaway (BRK.A, BRK.B) on Monday, November 25th, Buffett stated in a letter to Berkshire shareholders that he will donate approximately $1.2 billion worth of Berkshire stocks to four family foundations. Buffett also mentioned that he believes his three children can handle matters related to donating his massive wealth after his passing.

94-year-old Buffett further explained the message he conveyed last year, revealing that his three children - Howard Buffett, Susan Buffett, and Peter Buffett - will be responsible for donating his wealth, which is almost entirely in approximately $148 billion worth of Berkshire stocks.

Buffett wrote in his letter to shareholders: "The fact is, we can entrust our expectations to our children. After my passing, they will be fully responsible for gradually distributing all the Berkshire stocks I hold, which currently account for 99.5% of my wealth."

Buffett mentioned that he will convert 1,600 shares of Berkshire Class A stock into 2.4 million Class B shares on Monday, donating 1.5 million shares to the Susan T. Buffett Foundation named after Buffett's late wife. He also plans to donate 0.3 million shares each to the Howard Buffett Foundation, the Sherwood Foundation operated by Susan Buffett, and the NoVo Foundation operated by Peter Buffett.

Buffett currently holds 0.206363 million shares of Berkshire Class A stock, valued at approximately $148 billion. Buffett's ownership stake in Berkshire is 14%, but his voting rights are about twice that number, as his ownership is concentrated in the Class A shares with super voting rights.

As of Monday, $Berkshire Hathaway-A (BRK.A.US)$ it has risen by 30.30% this year, $Berkshire Hathaway-B (BRK.B.US)$ up 31.72%, outperforming $S&P 500 Index (.SPX.US)$, with a market cap exceeding $1 trillion.

Buffett said in his letter to shareholders that he originally didn't want to create a plan that goes beyond the scope of his children, but with his three children aged 71, 69, and 66, they may not live long enough to donate his huge wealth.

Buffett wrote, "In view of this, three potential successor trustees have been designated, my children are very familiar with the nominees, we all believe it should be done this way, and they are also younger than my children."

A year ago, when Buffett revealed that his children would be in charge of donating his wealth, he mentioned that the Buffett Trust is expected to automatically liquidate in "about 10 years." However, in his Monday letter, he did not mention "10 years," which could be because he realized the difficulty of donating such a large sum in around 10 years.

Buffett also elaborated on a decision he revealed a year ago, that unanimous agreement among his three children is required for donation decisions after his death. Buffett pointed out that some wealthy friends had questioned this requirement, saying they asked him, "How is this possible?"

Buffett wrote, "I explained to them that what will always be around my children are sincere requests from very close friends and others. The second reality is: when someone wants a large charity donation, if someone says 'no,' it often prompts potential recipients to consider alternatives, another friend, a different project, and so on."

"Those capable of making large donations have always been seen as 'opportunity targets,' this unpleasant reality is inevitable, so I have established a 'unanimous consent' provision, this restrictive clause allows applicants for donations to immediately receive a final response: 'My brother will definitely not agree.' And this answer will make my children's lives better."

"Of course, my 'unanimous consent' provision is not a cure-all, if you have 9, 10 children or step-children, it clearly doesn't work, and it doesn't solve the tricky problem of how to fairly distribute billions of dollars each year."

Buffett wrote that when he was young, he was confident he would become wealthy, "however, the wealth acquired in the United States over the past few decades is beyond the dreams of me or anyone else, it surpasses the imagination of Ford, Carnegie, Morgan, and even Rockefeller."

"I was born at the beginning of the Great Depression, when things were not good, but the true power of compound interest is reflected in the last twenty years of life. By not doing foolish things, at 94 I have not been eliminated, owning a huge savings—I call it deferred consumption—these savings can be transferred to those who were born very poor."

My philanthropic philosophy has also been supported and extended by two wives, and I am fortunate in this regard, whether it is me, the late Susan, or Astrid (Buffett's second wife), all believe that inherited wealth has no benefits.

Editor/Rocky