Travelers Companies Inc (TRV), The Allstate Corporation (ALL), The Chubb Corporation (CB): One Property & Casualty Insurance Company To Buy

The Chubb Corporation (NYSE:CB) is continuing to diversify its lines of business as well as its geography. Currently, the insurer has written premiums of 26% from outside of the U.S., and is looking to increase that to 33% by 2016. Chubb is also diversified by segment, with 35% in personal insurance, 43% in commercial, and the remaining 22% in specialty insurance.

Net premiums written grew 4.1% in 2012 to $11.9 billion. The Chubb Corporation (NYSE:CB) has one of the highest operating margins at 16.3%, as competition in the high-end insurance business is limited. Chubb will continue to see growth opportunities in its international segment, which will even out the earnings and payouts from natural disasters.

Foolish Bottom line

Chubb group has created the largest moat of these three insurers by catering to an under-served audience – the super wealthy. It also has the greatest international presence at 25%, while Travelers Companies Inc (NYSE:TRV) only has 4% of its total premium written outside of the U.S. This international exposure will give The Chubb Corporation (NYSE:CB) less exposure to catastrophic losses due to geographic area.

Operating margins in the property and casualty insurance industry will continue to be under pressure from lower investment yields and rising losses from significant catastrophes. To make up for this, the industry, as a whole, will be increasing rates charged to consumers and businesses. Since auto insurance is becoming mandatory in more states, we will continue to see profits in these companies.

The article 1 Property & Casualty Insurance Company To Buy originally appeared on Fool.com and is written by Wes Patoka.

Wes Patoka has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Wes is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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