Company Reports

Like its peers, Chubb is posting strong results at the moment amid a hard pricing environment and higher interest rates. Annualized core tangible return on equity was impressive at 22%, but not out of line with what we've seen from peers. We think the near-term outlook is bright for Chubb and see the narrow-moat company as one of the strongest names in the space. We will maintain our $236 fair value estimate and see shares as about fairly valued.

In January 2016, ACE acquired Chubb in a deal valued at about $28 billion and assumed its name. From a long-term perspective, we were most enthusiastic about the fact that the combination created a moaty international insurer with exposure across most insurance lines for the first time, marking Chubb as potentially the most attractive long-term core holding in the space from a fundamental point of view.

Narrow-moat Chubb's reported fourth-quarter earnings were aided by a $1.1 billion one-time tax benefit related to a new income tax law in Bermuda. However, even excluding this impact, results largely held strong, with annualized return on equity coming in at 16%, or 24% on a core tangible basis. For the full year, ROE was 22% on a core tangible basis, excluding the tax impact. Like its peers, Chubb has been benefiting from a hard pricing environment, but we also think that relatively disciplined insurers like Chubb have more leverage to this type of market condition. We will maintain our $226 fair value estimate and see the shares as roughly fairly valued at the moment.

P&C insurers have had substantial pricing increases across lines recently, but otherwise, commercial and personal insurers are in very different places. For commercial insurers, an extended period of strong price increases has them in a hard market and realizing attractive underwriting margins. Underlying combined ratios have flattened out recently, and we don't expect any significant improvement. Still, this should leave commercial insurers in a strong position over the next couple of years. Personal auto insurers have endured a difficult period in the wake of the pandemic, due to a variety of negative claims trends, and have been pushing pricing to catch up. While they are not out of trouble yet, we think the third quarter could mark the start of a turn toward more normalized underwriting results.

In January 2016, ACE acquired Chubb in a deal valued at about $28 billion and assumed its name. The deal looked fairly valued and there were meaningful cost benefits involved, with management eventually exceeding its initial targets. However, from a long-term perspective, we are most enthusiastic about the fact that the combination created a moaty international insurer with exposure across most insurance lines for the first time, marking Chubb as potentially the most attractive long-term core holding in the space from a fundamental point of view.

Chubb continued its string of strong results with another good showing in the third quarter. We consider the annualized return on equity of 16% in the quarter to be a solid result for the narrow-moat insurer, and the level this quarter improved modestly sequentially. While this is partially the result of favorable market conditions, we think disciplined insurers like Chubb have more leverage to a hard market. We will maintain our $213 fair value estimate and see shares as roughly fairly valued at the moment.

Chubb posted a strong second quarter and appears to have avoided the catastrophe losses that have affected some of its peers. An annualized return on equity of 14% (21% on a core tangible basis) was roughly in line with last quarter, which we consider a strong result for the narrow-moat insurer. We think disciplined underwriters such as Chubb have more leverage to a harder market and view recent results as supporting this idea. We will maintain our $213 per share fair value estimate.

In January 2016, ACE acquired Chubb in a deal valued at about $28 billion and assumed its name. The deal looked fairly valued and there were meaningful cost benefits involved, with management eventually exceeding its initial targets. However, from a long-term perspective, we are most enthusiastic about the fact that the combination created a moaty international insurer with exposure across most insurance lines for the first time, marking Chubb as potentially the most attractive long-term core holding in the space from a fundamental point of view.

Chubb continued to benefit from the hard market in commercial lines during the first quarter. We view the reported annualized return on equity of 15% (or 19% on a core tangible basis) as a strong result for the insurer, supporting our view that relatively disciplined underwriters such as Chubb have more leverage to a harder market. We will maintain our $208 fair value estimate for the narrow-moat company and view the shares as being about fairly valued.

Chubb's fourth-quarter results were a little soft, largely due to an underwriting loss in its agricultural business. Still, we see an annualized core tangible ROE of 19% in the quarter and 18% for the full year as a solid result—reflective of both the company's narrow moat and the strong overall market conditions Chubb is currently enjoying. We will maintain our $208 per share fair value estimate.

In January 2016, ACE acquired Chubb in a deal valued at about $28 billion and assumed its name. The deal looked fairly valued and there were meaningful cost benefits involved, with management eventually exceeding its initial targets. However, from a long-term perspective, we are most enthusiastic about the fact that the combination created a moaty international insurer with exposure across most insurance lines for the first time, marking Chubb as potentially the most attractive long-term core holding in the space from a fundamental point of view.

Chubb’s third-quarter results were weighed down by losses associated with Hurricane Ian and ongoing noise on the investment side. However, we see the underlying performance of the company as strong. The reported annualized return on equity of 7% in the quarter is not impressive, but stripping out investment losses and excluding goodwill, it was 14%, reflecting solid underlying excess returns for this narrow-moat franchise. We think disciplined underwriters such as Chubb have more leverage to better commercial market conditions and that the near-term outlook for the company is relatively bright. We will maintain our $203 fair value estimate.

Given the differing states of the pricing cycle across lines and recent capital market movements, property and casualty insurers have a variety of tailwinds and headwinds at the moment. Commercial line insurers have seen strong pricing increases over the past few years, and we think the outlook for that area is relatively bright, as attractive underlying combined ratios create a solid base for strong profitability. Conversely, following a burst of abnormally high profitability in the early stage of the pandemic, personal auto insurers have struggled with a number of headwinds more recently, which has pushed most players into significant underwriting losses. Higher interest rates have reduced carrying value for fixed-income investments but offer the possibility of better investment income going forward. Finally, the bear market creates issues for insurers with an equity-heavy investment approach.

In January 2016, ACE acquired Chubb in a deal valued at about $28 billion and assumed its name. The deal looked fairly valued and there were meaningful cost benefits involved, with management eventually exceeding its initial targets. However, from a long-term perspective, we are most enthusiastic about the fact that the combination created a moaty international insurer with exposure across most insurance lines for the first time, marking Chubb as potentially the most attractive long-term core holding in the space from a fundamental point of view.

Chubb continued to benefit from a harder pricing market in the second quarter, and underwriting profitability continues to improve. While the investing side was a drag, we think the core annualized tangible return on equity of 19% for the quarter was a strong showing for the narrow-moat franchise. We think disciplined underwriters such as Chubb have more leverage to better market conditions, and that appears to be playing out. We will maintain our $193 per share fair value estimate.

Much as we have seen at peers, Chubb reported a strong first quarter, with better industry conditions acting as a tailwind for the narrow-moat company. Annualized core ROE was 11% in the quarter, or 17% on a tangible basis. We will maintain our $193 fair value estimate.

In January 2016, ACE acquired Chubb in a deal valued at about $28 billion and assumed its name. The deal looked fairly valued and there were meaningful cost benefits involved, with management eventually exceeding its initial targets. However, from a long-term perspective, we are most enthusiastic about the fact that the combination created a moaty international insurer with exposure across most insurance lines for the first time, marking Chubb as potentially the most attractive long-term core holding in the space from a fundamental point of view.

Much like what we have seen from its peers, Chubb closed out the year on a strong note, as pricing increases have led to improved underwriting profitability. We think the annualized adjusted tangible return on equity of 18% for the quarter and 15% for the full year support our narrow moat rating. We will maintain our $178 fair value estimate.

Chubb continued to leverage a harder pricing market to drive solid third-quarter results, with the narrow-moat franchise generating an annualized ROE of 12% in the quarter despite an uptick in catastrophe losses, or 13% on a core tangible basis. We will maintain our $178 fair value estimate.

In January 2016, ACE acquired Chubb in a deal valued at about $28 billion and assumed its name. The deal looked fairly valued and there were meaningful cost benefits involved, with management eventually exceeding its initial targets. However, from a long-term perspective, we are most enthusiastic about the fact that the combination created a moaty international insurer with exposure across most insurance lines for the first time, marking Chubb as potentially the most attractive long-term core holding in the space from a fundamental point of view.