Chubb Is A Global Leader In An Industry Poised To Outperform The Market

Summary

• Insurance is a highly fragmented, competitive commodities-like market, whose unique characteristics allow many players to earn economic profits.
• The company has consistently earned excellent underwriting profits, with its combined ratio topping that of its peers.
• Chubb’s scale will allow an already low cost insurer to reduce costs even further.
• Chubb has shown strong profitability and an ability to generate large and growing free cash flows, which it has used to increase its dividends for each of the last 28 years.
• Like the rest of the financial sector, the company remains undervalued, but this could be the year financials outperform the market.

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Chubb Limited (NYSE:CB) is one of the world's great insurance brands. The insurer has consistently earned underwriting profits, while also driving its expense ratios down in an industry where price is the key differentiator between otherwise undifferentiated

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.