1. Chubb Limited (NYSE:CB)
Oldfield Partners’ Stake Value: $95,323,396
Percentage of Oldfield Partners’ 13F Portfolio: 18.01%
Number of Hedge Fund Holders: 59
Chubb Limited (NYSE:CB) is a major insurance provider that offers homeowners insurance through its personal property and casualty division. While its broad portfolio helps mitigate risks, Chubb faces challenges in sectors like agriculture and has exposure to both U.S. and international property markets. This diversification allows Chubb to benefit from high premiums and lower catastrophe payouts in some regions, even if U.S. payouts are higher. The company also leverages increased premiums across various sectors for investment income. However, its large scale requires maintaining substantial reserves to ensure liquidity in the event of significant disruptions.
Chubb Limited (NYSE:CB)’s shared insights on the impact of catastrophe on its property division during its Q2 2024 earnings call:
“Our middle market P&C business grew at 11%. Our E&S business grew at 8.7%. Our large-account business grew a little slower clip. Our financial line shrank, while P&C grew. I’ve gone through that where rates achieve a risk-adjusted return from everything we can tell, that we contemplate achieving, we’re growing that business as fast as we can. Where it’s not achieving it, we’re striving to achieve it. Where we can’t earn an underwriting profit, we’re shrinking. Where it’s adequate, we’re growing as fast as we can. And we have the capital, the depth of balance sheet and an appetite and knowledge and geographic reach and the distribution brand, the underwriting capability to grow in those areas where we want to grow.
And there are times we’ll trade rate for growth and we’ll — there are times we’ll trade growth for rate. We’re doing both. And when it comes to the current accident year combined ratio, I’ve said before and I’ve written this, it’s very interesting about the industry’s current accident year combined ratio ex-cat. Property is a much larger part and a growing — everybody is more cat-levered because of the changes in the [reinsurance] (ph) market, the rates and terms. And we take the cat loss out of the numerator, but in the denominator, we leave all the premium, that naturally drives down our current accident year combined ratio in mix of business all else being equal. So, it’s — I look — that’s a part and parcel of the published combined ratio, which is the primary number that everyone should look at.
And the current accident year to look through volatility is a secondary indicator. And that’s how I think of about. And I think what we published of an 86.8%, which has higher cat losses than prior quarter — prior year’s quarter because volatility in property is simply an outstanding number. I hope that answers your question. This is a company with big appetite and — but a big appetite and an ambition to grow when we can earn a reasonable return.”
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