CEO Evan Greenberg Offers No Apologies for Insurance Company’s Actions and Support of the Rule of Law
3/18/24 – – In his recently released 2023 Letter to Shareholders, Chubb’s Chairman and CEO Evan Greenberg offers this description of his company’s mission: “At our core, we are an underwriting company, dedicated to the art and science of taking risk.”
The insurance giant’s willingness to take reputational as well as financial risk was on display last week when it became public that Chubb’s surety division provided Donald Trump with a $91.6 million appeal bond related to the New York civil case brought against the former President by E. Jean Carroll.
The court found Trump guilty of defaming Carroll, who claims Trump raped her three decades ago in a dressing room at the high-end Manhattan department store Bergdorf Goodman. Trump denies the charges and has appealed the guilty verdict as well as the court’s $83.3 million penalty. (The bond is larger than the judgement because it includes accruing interest.) The collateralized bond assures that Carroll will be paid if Trump loses his appeal.
It was no surprise when Trump critics protested Chubb’s support and attacked Greenberg, a Republican, who served on economic advisory committees during the Trump presidency. He served in a similar role for President Biden for two years, but that didn’t soften resentment. A March 8 New Republic headline, which appeared under a photo of Greenberg, captured the tone of the assault on the company and its CEO:
What Idiot Backed Trump’s Bond in Jean Carroll Trial? This One.
Mounting a Defense by Going on Offense
Responding to mounting pressure, Greenberg on Wednesday issued a letter — not a press release — to investors and customers that began:
I am writing to you because I have been made aware of your concerns about the appeal bond the company’s surety division provided in the E. Jean Carroll defamation suit against Donald Trump. I want to provide you with the facts, including the purpose of appeal bonds and why our company provides these bonds so you understand our actions.
I’ve linked to the letter here and encourage you to take a look.
In the letter Greenberg confidently explains: “As the surety, we don’t take sides,” adding that the company’s decision to provide a bond, “has nothing to do with the underlying merits or with favoring any of the parties in the case.”
Without being condescending, the excellent letter provides information about a complicated part of the insurance industry unfamiliar even to Chubb’s investors and customers. Offering no apologies, Greenberg concludes with awareness of reputational risk:
I fully realize how polarizing and emotional this case and the defendant are and how easy it would be for Chubb just to say no. However, we support the rule of law and our role in it.
Chubb’s Messaging and Strategy Quiet the Storm — For Now
The letter, which was “obtained” by the media as soon as it was released, has passed one of the most important tests of crisis response: Media coverage and online chatter, intense before Greenberg issued his letter, has dwindled to near silence.
Of course, Chubb and Greenberg could be in the headlines again if Trump loses his appeal and is unable to make the payment to Carroll. Then Chubb is on the hook for the payment and will have to take possession of the properties Trump has put up as collateral (which have not been disclosed).
You have to wonder how much more collateral Trump has to offer. You can’t pledge the same assets for two different bonds. And today we learned from Trump’s attorneys that they are facing “insurmountable difficulties” as they attempt to secure a bond to guarantee payment of the $454 million civil fraud judgement against him, which he is also appealing. Today’s New York Times headline is not good news for the beleaguered, but politically still-standing former President:
Trump Spurned by 30 Companies as He Seeks Bond in $454 Million Judgement
Chubb, which has a well-earned reputation for being very good at “the art and science of risk,” has declined to comment.
https://www.documentcloud.org/documents/24479976-chubb-letter-on-trump-bond-3132024
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