6. Chubb Limited (NYSE:CB)
Number of Hedge Fund Holders: 51
Chubb Limited (NYSE:CB) is an American Swiss insurance company that offers a wide range of related products and services to its consumers. In the third quarter of 2024, the company posted net income of $2.32 billion, up 13.8% from the same period last year. The company’s net premiums came in at over $12.2 billion, which showed a 5.4% growth from the prior-year period. Its P&C underwriting results for the quarter were strong, with significant contributions from all divisions, despite a period marked by widespread industry catastrophe losses. The combined ratio stood at 87.7%, and P&C underwriting income saw an increase of over 11.5%.
Insurance stocks stand out for their strong pricing power, regardless of the economic environment. In the wake of catastrophic losses, insurers can justify raising premiums, and even during periods of fewer claims, they can cite the inevitability of future risks to support premium increases. Essentially, insurers operate as steady, profit-generating machines. Chubb Limited (NYSE:CB) is particularly appealing due to its emphasis on high-income customers, especially in its homeowner insurance segment. Wealthier individuals are less likely to alter their spending habits or default on bills and premiums during minor economic downturns, providing greater stability for the company. Since the start of 2024, the stock has surged by over 25.2%.
The London Company made the following comment about CB in its Q3 2024 investor letter:
Initiated: Chubb Limited (NYSE:CB) – CB engages in the provision of commercial and personal property and casualty insurance, personal accident and health (A&H), reinsurance, and life insurance. While the company is headquartered outside the U.S., roughly 2/3 of its profits are generated in the U.S. with Asian markets representing another 20% of earnings. CB has a portfolio of top-performing, multibillion-dollar businesses that have substantial scale and yet potential for growth. CB has a culture of superior underwriting discipline, and management has a strong track record of expense control. CB also has a well-balanced mix of business by customer and product, with extensive distribution channels. We are attracted to CB’s globally diversified business model, superior underwriting and expense management, consistent and best-in-class profitability, upside potential from growth in Asia, and the potential to benefit from higher interest rates in its investment portfolio.
Chubb Limited (NYSE:CB) generated over $4.55 billion in operating cash flow during the quarter. Currently, the company pays a quarterly dividend of $0.91 per share for a dividend yield of 1.28%, as of December 4. It is one of the best dividend stocks on our list with 31 consecutive years of dividend growth under its belt.
Chubb Limited (NYSE:CB) was a popular buy among elite funds at the end of Q3 2024, with hedge fund positions growing to 51, from 46 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a collective value of over $10 billion. Warren Buffett’s Berkshire Hathaway owned the largest stake in the company.
