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: Theresa Revas

Due to the Thanksgiving holiday, the trading hours for the usa stock market were shortened last week, but it did not stop.$S&P 500 Index (.SPX.US)$This marked the 53rd closing high of the year, and the dow jones industrial average also reached its 47th closing high.

Overall, November has become another remarkable month in an already stellar year, with the s&p 500 index rising 5.7% in November, and a cumulative increase of 26.5% so far this year. Notably, the s&p 500 index is not even the best performing among the major indices.$Nasdaq Composite Index (.IXIC.US)$In November, there was an increase of 6.2%,$Dow Jones Industrial Average (.DJI.US)$ an increase of 7.5%,$Russell 2000 Index (.RUT.US)$an increase of 10.8%.

The excitement among investors following the conclusion of the presidential election in the usa has been replaced by a more pragmatic analysis of what changes might occur in Washington. However, there is still some time before the presidential inauguration day, and it is unlikely to cause too much concern. As of now, it seems that nothing can prevent the arrival of the year-end 'Santa Claus rally.'

First of all, the economic data in the usa remains healthy. The drop in initial jobless claims published last week exceeded expectations, falling to a seven-month low. Meanwhile, the core PCE price index, which is the inflation indicator most closely watched by the Federal Reserve, met expectations. The Bureau of Economic Analysis's forecast for the real GDP growth rate in the third quarter is 2.8%, aligning with market expectations.

Strategists believe that this situation will continue.

Dubravko Lakos-Bujas, head of global market strategy at jpmorgan, predicts in his outlook for the coming year that the usa will "continue to hold its position as the engine of global economic growth, the business cycle is expanding, the labor market is healthy, ai-related capital expenditures are increasing, and the outlook for capital markets and trade activities is strong."

Indeed, although $Dell Technologies (DELL.US)$And$HP Inc (HPQ.US)$the earnings reports released last week were lackluster, large technology companies had a solid performance in their third-quarter earnings season, and analysts have been raising their estimates.$NVIDIA (NVDA.US)$、 $Alphabet-A (GOOGL.US)$ / $Alphabet-C (GOOG.US)$ 、$Amazon (AMZN.US)$And.$Meta Platforms (META.US)$ The earnings expectations of major technology companies for the fourth quarter and 2025.

Similarly, the slow pace of new listings means more potential gains. Nicholas Colas, co-founder of DataTrek, wrote: "The pace of IPOs in the usa has always been a good indicator for predicting market tops, and by this standard, we may be at least a year or two away from a peak in the s&p 500 index."

Colas believes that the only factor that could disrupt this "party" is that the Federal Reserve may have to raise interest rates again to combat inflation, which was a factor in popping the internet bubble. However, the us stock market is still far from that level of bubble, and this is not Colas's baseline expected scenario.

Trump's recent proposal to impose tariffs on major trading partners like mexico and china seems to increase the probability of heightened inflation, but so far, the stock market has not been troubled by this. Tom Essaye, president of Sevens Report, said: "I don't believe Trump will follow through on these tariff policies."

Whether Trump will implement his tariff policies remains a question for investors in 2025, and the market's celebratory sentiment may continue through December, creating conditions for a "Christmas rally," as historically, when the us stock market performs strongly in both the first quarter and the first half of the year (like in 2024), that year almost always ends in gains.

Editor / jayden