Subject: Re: Barrons Makes Sense to buy Chubb outright
What is the beef people would have with Evan Greenberg?
The Trump bond thing was not popular, I gather, but other than that?


I could live with Chubb attempting to make a profit by making a securitized loan to Trump. But I would be suspicious of the Greenbergs, who have already gotten Berkshire into trouble in the past, via Gen Re, and a deal that Brandon made with AIG which the SEC believed was not really an insurance deal but an attempt to make AIG's balance sheet look better, and led eventually to Brandon stepping down from Gen Re.

While the World Socialist Web Site would not be my usual go-to source for information, they do do a good job of summarizing here some of the things that make me suspicious of Maurice and Evan Greenberg:
In the fall of 2004, Spitzer filed civil charges against the largest insurance broker in the country, Marsh & McLennan. At the time, Marsh was run by Hank Greenberg’s son, Jeffrey. As an insurance broker, Marsh does not sell insurance itself, but helps corporations purchase insurance from companies such as AIG and ACE Ltd. In return for fees from the companies seeking insurance, it is supposed to arbitrate a bidding process between the insurers so as to get the best insurance plans for its clients.

According to Spitzer, however, the company ran what amounted to an insurance racket. Marsh was accepting fees not only from companies seeking insurance, but from the insurers as well. In return for fees from the insurers, Marsh would send companies their way. Marsh allegedly rigged the bidding process by getting friendly insurance companies to submit artificially high bids. The high bid meant that the contract would go to another insurer; however, in return for playing the game—and creating the appearance of a competitive bidding process—the insurance company would be favored the next time around.

Two midlevel executives at AIG pled guilty for their role in the bid-rigging process. The civil charges filed against Marsh are still open. To avoid criminal charges, Jeffrey Greenberg was forced out of Marsh five months before his father resigned at AIG. The allegations of bid-ridding also involved ACE Ltd., which is run by another of Hank Greenberg’s sons, Evan. ACE has a lawsuit pending against it for allegedly providing kickbacks to Marsh.
https://www.wsws.org/en/articl...


Interestingly, Berkshire has already gotten into trouble with the SEC, because of Gen Re's dealings with the Greenbergs at AIG: https://www.sec.gov/news/press...


Brandon is back in Berkshire now, via Alleghany. And no doubt Buffett knows a lot more about the Greenbergs, via Brandon and others, than I ever will. I think he liked Maurice Greenberg, and had a hard time finding fault even with some of the shadier transactions they got involved in. But if something ever goes wrong with Chubb, I won't be surprised, and Greenbergs, like the Haslams, remind me of a couple of Munger quotes, one involving pigs, the other involving raisins...

dtb