Shares of Chubb Limited CB have gained 7.4% in the past six months, outperforming the S&P 500 composite’s growth of 5.4%. It, however, underperformed the industry’s growth of 10.6% and the Finance sector’s return of 10.3%.

Six Months Price Performance

With a capitalization of $109.53 billion, the average volume of shares traded in the last three months was 1.47 million.

Chubb’s Growth Projection Encourages

The Zacks Consensus Estimate for Chubb’s 2025 earnings per share and revenues indicates an increase of 6.1% and 7.5%, respectively, from the corresponding 2024 estimates.

Earnings have grown 19.4% in the past five years, better than the industry average of 11.4%. The expected long-term earnings growth rate is 2%. CB beat earnings estimates in each of the last four quarters, with an average surprise of 22.19%.

CB’s Return on Capital

Return on equity in the trailing 12 months was 15.5%, better than the industry average of 7.6%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.

Also, return on invested capital (ROIC) has been increasing over the last few quarters amid capital investments made over the same time frame. This reflects CB’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 10.1%, better than the industry average of 5.8%.

Key Points to Note for CB

Chubb remains focused on capitalizing on the potential of middle-market businesses (both domestic and international) as well as enhancing traditional core packages and specialty products for long-term growth. The insurer is also making strategic investments in various initiatives that will accelerate growth.

Chubb, one of the world’s largest providers of property and casualty (P&C) insurance, pursues strategic mergers and acquisitions to diversify its portfolio, add capabilities and synergies, and expand its geographic footprint. Acquisitions have also improved premium revenues. Premiums should also benefit from commercial P&C rate increases, new business and strong renewal retention.

Though the Fed has started lowering the interest rate, investment income should benefit from improving operating cash flow.

Chubb has a strong capital position and sufficient cash-generation capabilities, which support wealth distribution to shareholders and growth initiatives.

Being a P&C insurer, CB is exposed to catastrophe events, which induce volatility in underwriting profitability and affect the combined ratio. Given the uncertainty surrounding the magnitude of cat loss, higher losses could drain earnings.

Recently, Chubb estimated losses from Hurricane Milton between $250 million and $300 million pre-tax and $208-$250 million after-tax, net of reinsurance and including reinstatement premiums. These losses will weigh on the profitability of its commercial and personal property and casualty insurance businesses, as well as its reinsurance operations, in the fourth quarter of 2024.