We recently compiled a list of the 12 Best Property & Casualty Insurance Stocks to Buy Now. In this article, we are going to take a look at where Chubb Limited (NYSE:CB) stands against the other property and casualty insurance stocks.
The property and casualty (P&C) insurance sector is a pivotal part of the global financial landscape, providing essential coverage against a wide array of risks that both individuals and businesses face daily. These risks can range from property damage and natural disasters to accidents and liabilities, and the need for reliable insurance coverage has made the P&C sector one of the most significant in the financial markets.
Technological Advancements and Digital Transformation:
The shift toward digitalization has become a hallmark of the P&C insurance sector. Insurers are increasingly relying on advanced technologies like artificial intelligence (AI), machine learning, and big data analytics to improve underwriting, pricing, and claims processing. Leveraging these technologies, insurers can better predict risks, optimize pricing models, and streamline claims handling processes, all while improving the customer experience. According to a report from Reuters, AI has been valuable in insurance pricing and underwriting, enabling insurers to analyze large volumes of data quickly and make more accurate decisions, although success has been more limited when AI entirely takes over underwriting.
Impact of Climate Change:
While the technology-driven transformation is a key trend, another significant shift within the P&C insurance sector is the growing focus on environmental, social, and governance (ESG) factors. According to a report by PwC, insurers are increasingly under pressure to assess and address the environmental impact of the risks they insure. This includes evaluating the implications of climate change on their portfolios and developing sustainable insurance products that align with global efforts to combat environmental degradation.
Social issues such as cybersecurity threats and the growing need for cyber insurance have prompted P&C insurers to develop new policies and coverage options to protect businesses and individuals from the increasing risks associated with digital exposure. According to a report by the National Association of Insurance Commissioners (NAIC), the number of cyber insurance policies in force increased by 11.7% in 2023, reaching almost 4.4 million policies. This growth reflects a growing recognition of the need for coverage against cyber risks.
Competitive Landscape:
The competitive landscape within the P&C insurance market is also evolving. As the demand for insurance products grows, more companies are entering the market, while established players are expanding their offerings and geographic reach. In December 2024, Florida welcomed eight new home insurance companies, aiming to stabilize the property insurance market and provide homeowners with more choices. Insurers are seeking to gain a competitive edge through mergers, acquisitions, and strategic partnerships that enable them to scale operations, enter new markets, and diversify their portfolios. For instance, Swiss insurer Baloise announced plans to increase its return on equity to 12-15% and generate over $2.3 billion in cash between 2024 and 2027, following a strategic refocusing.
For investors, the property and casualty insurance sector presents a range of opportunities, particularly as the industry is characterized by strong demand for essential services, as well as solid fundamentals in many of the top companies. Some of the biggest players in the sector have demonstrated remarkable financial performance, boasting robust growth in both premium volumes and profits despite challenges such as inflation, natural disasters, and increased regulatory scrutiny. Given this, we will take a look at some of the best insurance stocks.
Our Methodology
For this list, we examined the holdings of the Invesco KBW Property & Casualty Insurance ETF (KBWP), which tracks companies in the property and casualty insurance sector. We then consulted Insider Monkey’s database of hedge fund holdings as of Q3 2024 to identify which of the ETF’s holdings had the highest number of hedge fund investors. We ranked the top 12 companies based on the number of hedge funds holding stakes in them, providing a list of firms with significant institutional interest in the property and casualty insurance industry.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
A close-up of an insurance agent’s hand pointing to a marine insurance policy, highlighting the company’s expertise in marine coverage.
Chubb Limited (NYSE:CB)
Number of Hedge Fund Holders: 51
Chubb Limited (NYSE:CB) is a global insurance company operating in more than 50 countries, providing coverage to individuals, businesses, and institutions. With a strong focus on delivering high-quality risk management and claims services, the company is recognized for its innovative solutions in the insurance sector.
In January 2025, Chubb Limited (NYSE:CB) made key leadership changes in its Overseas General Insurance (COG) division to enhance underwriting consistency and drive international growth. Tim Stapleton was appointed Chief Underwriting Officer, focusing on improving underwriting operations and standards. Jason Neu, with Chubb Limited (NYSE:CB) since 2004, will take over as Executive Vice President for the international financial lines division. These moves reflect the company’s commitment to operational excellence and better meeting global client needs.
Financially, the company reported impressive results for the fourth quarter of 2024, with a record property and casualty underwriting income of approximately $1.6 billion, a 3.8% increase from the same period the previous year. Operating income for Q4 was $2.45 billion, down 28.1% year-over-year, but for the full year, it reached $9.2 billion, reflecting a slight 1.5% decline from 2023. Chubb Limited (NYSE:CB)’s operating earnings per share (EPS) for Q4 grew 10.5%, and the company maintained strong shareholder returns, repurchasing $725 million in shares and paying out $367 million in dividends.
51 hedge funds in Insider Monkey’s Q3 2024 database held positions in Chubb Limited (NYSE:CB).
Overall CB ranks 3rd on our list of the best property and casualty insurance stocks to buy. While we acknowledge the potential for CB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
