Chubb has bought back shares, which explains some of the outperformance here, and its excess capital drag is now showing signs of improving, with plenty of room in the 5 billion share repurchase. During the past year, the company has actually had excess capital that has been a bit of a drag on its return metrics. In conclusion, the company delivered a solid 3Q21. While I've made good returns with my Chubb investment and definitely beat the market, the company has delivered some solid results that warrant the recalibration of our investment targets and forecasts. Unfortunately, that's not really Chubb here. Instead, I try to find the best combination of growth and safety with a good yield that the market offers at this time. I'm not looking to get into volatile situations, typically, especially not for the majority of my readers or clients. That is a good thing - because boring investing is exactly what I'm looking for. In short, Chubb is doing well, is navigating this environment well, and enjoys some of the fruits of these labors.Ĭhubb, to me, is as boring and conservative an insurance investment as it can get. This goes to advance the company's goals of pushing its business into APAC, with a 20% business target during 2022 and moving forward. This is a solid operation with around $3B in premium revenue isn't exposed to the P&C cycle, and already has excellent underwriting margins. Chubb sees continued margin expansion and business/earnings growth going forward from these favorable trends.Ĭhubb has also decided to acquire life/non-life insurance companies of Cygnet (in APAC) at a $5.75B, a full cash deal with no dilutive effect on current shareholders. The underlying economic recovery on a global scale is possible for the company to capitalize on here, and the trends in agriculture specifically are, as mentioned, very positive. New business grew by double digits for all commercial areas, and Chubb is effectively losing less than 3% of its customer base, meaning retention is over 97%. The double-digit growth was general, and some areas, like Agriculture, saw premium growth of over 40%. There is a very solid P&C pricing environment. This confirms a very positive picture of the company's overall market and the trends we're seeing. The company saw some superb trends in P&C premiums, meaning that premiums were up double digits globally, with contributions from all business lines. Chubb produces underwriting income like few others - and all of these positive trends, including net investment income of almost $950M. P&C underwriting income grew by 58% to well over $600M for the quarter.ĭiversification and fundamentals as well as simplification (in terms of its business) are key here. Recent 3Q21 results saw P&C premium revenue grow by 17% globally, as well as massive income increase expansion. Its pandemic performance has been excellent. Unlike other businesses and companies, Chubb only does insurance, which simplifies its operations and risk profile. It remains the largest commercial lines insurer in all of the US, and one of the largest financial lines writers in the world. Recent earnings confirm much of the positives here. It's A-rated, good dividend history, and it's on a growth trajectory. It has one of the most appealing premium diversification I've seen in the entire industry. If you recall my original article for Chubb, this company has a lot going for it. Let's see what we can get here, from this particular point. My investment has already realized much of the gains I expected from Chubb for the year. You may recall that I wrote on the company a few months back, and I think it's a great time to update on this name, given that it is a very value-heavy business.Ī-rated, safe insurance without a dividend cut in its history in over a decade? Yes, please - at least, at the right valuation. With that in mind, I'm going to look at Chubb Ltd. It's almost the exact opposite of the situation when tech as a sector was flying high and value low. Investors such as myself - I sold my last tech a few weeks back and began rotating what little "risk" I had into value stocks, have seen a different development, with core portfolio trends still positive YTD and showing immense stability in the face of some of these drops. This of course impacts YTD trends, and most investors heavy in tech names are seeing a lot of red ink in their portfolios. Nasdaq is selling off heavily, with tech names taking an absolutely brutal beating. I'm writing this on a weekend, after an excitingly tumultuous week on the markets.
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