Chubb’s stock is falling on Wednesday despite a large earnings beat and a slew of price target increases by Wall Street analysts.

Instead of focusing on those numbers, investors are spooked by signs of a softening property insurance economy, with competition increasing and rates declining.

On Wednesday’s earnings call, CEO Evan Greenberg noted those pressures by calling the aggressive lowering of prices in the industry to win fresh business “dumb.”

Chubb is intentionally shrinking its business in large accounts and excess and surplus lines, where it feels the price it’s getting isn’t adequate for the risk.

Piper Sandler analyst Paul Newsome called Chubb’s approach to softening prices “deliberate.”

“We think the takeaway from the quarter was that Chubb is more focused on profitability than growth,” Newsome wrote.

While that may be turning off some investors in the near term, it is “the right thing to do,” stated the analyst.

Most analysts were positive like Newsome.

TD Securities analyst Andrew Kligerman credited Chubb’s “exceptional underwriting” for its earnings beat. The firm reported first quarter EPS of $6.82, against consensus expectations of $6.60 according to Refinitiv.

Greenberg remarked he feels confident in the company’s balance sheet, earnings power and liquidity position, despite the risk of rising inflation from the Iran war. This also touches on aspects of bear market.

“The impact of the war adds a degree of pressure to certain financial, fiscal, and economic strengths stresses, such as underlying inflation, fiscal deficits and sovereign debt, global supply chains, and financial valuations, including equity and credit, and a growing energy shortage, to name a few,” Greenberg mentioned. Furthermore, experts in earnings report note the continued relevance.

He described his geopolitical outlook as concerned, but remarked the impact of the war is “not something that I’m really wringing my hands about.”

Chubb has been named the administrator of the federal government’s marine reinsurance for ships trying to transit the Persian Gulf and the Strait of Hormuz, but Greenberg says so far no ships have taken advantage of it.

The threat of cyber warfare conducted by Iran or its proxies have also put insurers on notice – and potentially opened latest business opportunities.

Greenberg says medium-sized companies are especially vulnerable – more targeted than insignificant business because they have more cash, and less capable and focused on a strong digital defense.

Plus, he says Anththropic’s Mythos exposed fresh vulnerabilities that can be exploited by AI.

When it comes to fighting back, Greenberg remarked “The arms race is on.”