Chubb Well Poised for Growth Across All Business Segments

On Nov 26, we issued an updated research report on The Chubb Corporation (CB). The property and casualty insurer reported third-quarter operating income of $2.17 per share, which surpassed the Zacks Consensus Estimate by 11.3% and improved 5% year over year.

The solid results came on the back of strong underwriting performance across all business segments of Chubb, along with low catastrophe losses.

Chubb boasts a diversified product profile and has a niche presence in the industry it operates in.

Chubb’s Commercial Insurance segment has consistently impressed with earnings. The segment has been witnessing rate increase over the past several quarters. Retention ratio stands at a stable level.

Chubb’s Personal Insurance is also witnessing a gradual market improvement. Net premium written in this segment has been increasing over several quarters, led by strong premium increases from international business.

Chubb’s international business is also performing strongly and is an arsenal for its future growth.

Strong capital management witnessed by regular share repurchases and continuous dividend increase over several years makes the stock a favorite among investors.

However, exposure to catastrophe losses and a low interest rate environment are some of the headwinds.

Chubb has been witnessing an increase in earnings estimates. Over the last 60 days, the Zacks Consensus Estimate for 2014 moved up 6.7% to $7.46 per share as all the 11 analysts moved their estimates north.

Other Stocks to Consider

Chubb carries a Zacks Rank # 2 (Buy). Other stocks worth considering include Arch Capital Group Ltd. (ACGL), AmTrust Financial Services, Inc. (AFSI) and Selective Insurance Group Inc. (SIGI). All these stocks sport a Zacks Rank #1 (Strong Buy).