Chubb Earnings: Holding Steady Amid Tailwinds

Chubb produced another strong quarter to finish off the year. Like its peers, narrow-moat Chubb is benefiting from relatively strong underwriting conditions and higher interest rates. This led to a 22% annualized adjusted tangible return on equity in the quarter, in line with the previous quarter and the full-year result. We believe conditions will remain favorable in the near term, but we would caution that the insurance industry is highly competitive and inherently mean-reverting over the long run. We will maintain our $245 fair value estimate and see shares as modestly overvalued, as we believe the market is overly focused on the near-term picture.