Bailout Of Rivals Has Harmed Chubb Corporation’s (CB) Competitive Position, Says CEO
March 19, 2010 6:11 AM
Bloomberg reports that Chubb Corporation (NYSE: CB) CEO, John Finnegan, said the bailout of rivals which were struggling by the U.S. government has affected the smooth functioning of the markets and harmed Chubb’s competitive position.
Finnegan said, “The opportunities for financially strong companies to absorb the business of weakened competitors were initially compelling. This is as it should be in a free market unimpeded by federal intervention. But the willingness of the federal government to prop up weakened competitors by artificially injecting capital is troubling.”
The commercial property and high-end homes insurer managed to come out of the financial crisis largely unscathed. The company has been of the opinion that bailouts may have a negative impact on the industry.
Chubb managed to avoid losses related to subprime investments, which affected rivals such as American International Group, Inc. (NYSE: AIG) and Hartford Financial Services (NYSE: HIG). AIG received a $182.3 billion bailout package from the U.S. government, while Hartford received $3.4 billion from the government.
