CB Stock At Record Levels But Still Has 18% Upside Potential
In the classic movie Planes, Trains & Automobiles, Steve Martin, plays uptight advertising exec Neal Page. After facing off with slothful Del Griffith, played by John Candy, Page says “I could tolerate any insurance seminar. For days I could sit there and listen to them go on and on with a big smile on my face. They’d say, ‘How can you stand it?’ I’d say, ‘Cause I’ve been with Del Griffith. I can take ANYTHING.’”
The point is, for many, insurance is the zenith of boring. Even dealing with insurance companies can be the definition of futility: attempting to get a quote or make a claim, sitting on hold, and waiting to get paid out on a claim.
On the plus side, insurance companies make boat loads of money. It’s why investing titans like Warren Buffet, Carl Icahn, and Prem Watsa (the Canadian Warren Buffett) invest in insurance stocks.
Buffet invested in Geico and in 2022, Berkshire Hathaway (NYSE:BRK.A) bought Alleghany for $11.6 billion. The offer wasn’t subject to financing, nor did Berkshire conduct any due diligence.
Insurance companies make money and Buffet knows this.
How do they make their money? Premiums are the money we are forced to hand over to insurance companies every month or year for auto, home, medical, pet, etc. We pay our premiums upfront in case we ever need to make a claim.
Insurance companies, for their part, don’t put that money into an escrow account for us. They keep it, invest it however they want, and pay out claims only if they have to.
In a nutshell, you’re basically giving insurance companies an interest free loan. If you never make a claim, you didn’t just give them an interest free loan, it was a donation. Or, as they call it, “peace of mind.”
No other business in the world operates this way. Even banks have to provide you with a little interest. Not insurance companies, they support their business with money handed over by willing customers.
And that’s the joy of great insurance companies like Chubb Ltd. (NYSE:CB).
About Chubb Ltd.
Chubb is the world’s largest publicly traded Property & Casualty (P&C) insurance company, with market capitalization of $128.4 billion. It has operations in 54 countries and territories, 43% of its business comes from outside the U.S. (Source: “Chubb Limited Investor Presentation, Fourth Quarter 2025,” Chubb Ltd., February 13, 2026.)
Headquartered in Zurich, Switzerland, Chubb offers various kinds of insurance to a wide variety of clients. In addition to P&C, its offerings include reinsurance, life, personal accident, and supplemental health insurance.
Here are some of Chubb’s highlights:
- A global leader in traditional and specialty P&C coverage for businesses of every size
- The largest commercial lines insurer in the U.S. and one of the largest financial lines writers globally
- The leading personal lines carrier for America’s successful individuals and families and a large personal lines provider globally
- Global leader in personal accident and supplemental health insurance
- 43% of its business is from outside the U.S., including Asia (18%), Europe, Middle East & Africa (14%), Latin America (6%), and Bermuda/ Canada (5%)
- Chubb’s core operating insurance companies are rated “AA” for financial strength by the S&P 500 and “A++” by AM Best (the largest credit agency in the world)
Chubb actually has one of the largest product portfolios in the global insurance industry, with more than 200 distinct commercial insurance and reassurance products and services.
Record Financial Results
Chubb has a history of reporting record results. In the fourth quarter of 2025, net income jumped 28% on an annual basis to a record $3.21 billion, or $8.10 per share, core operating income came in at a record $2.98 billion, or $7.52 per share. (Source: “Chubb Reports Fourth Quarter Net Income of $3.21 Billion, Up 24.7%, and Core Operating Income of $2.98 Billion, Up 21.7%; Consolidated Net Premiums Written of $13.1 Billion, Up 8.9%, with P&C and Life Insurance Up 7.7% and 16.9%; Record P&C Combined Ratio of 81.2%; Full-Year Record Net Income of $10.31 Billion, Up 11.2%, and Record Core Operating Income of $9.95 Billion, Up 8.9%; Consolidated Net Premiums Written of $54.8 Billion, Up 6.6%, with P&C and Life Insurance Up 5.4% and 15.1%; Record P&C Combined Ratio of 85.7%,” Chubb Limited, February 3, 2026.)
P&C underwriting income grew 39.6% to $2.20 billion, with a record low combined ratio of 81.2%. A ratio under 100% shows the company is making an underwriting profit; the lower the number the greater the profit. If it’s above 100%, the company is payout out more than it receives in premiums.
Net income per share increased 13.1% to a record $25.68, while core operating income per share climbed 10.8% to a record $24.79. P&C underwriting income advanced 11.6% to a record $6.53 billion, with a record low combined ratio of 85.7%.
Commenting on the results, Evan G. Greenberg, Chairman and Chief Executive Officer said, “Our full-year results in virtually every category were the best in our company’s history. Record operating income was just shy of $10 billion, or $24.79 per share, up about 9% and 11%, respectively.”
“All three major sources of income for our company produced record results last year: P&C underwriting income was up 11.6% with an all-time-low combined ratio of 85.7%. Adjusted investment income rose 9%, with strong returns in both our public fixed income and private portfolios. Life insurance income was up over 13%.”
Raises Annual Dividend For 33rd Consecutive Year
Chubb is known for its growing annual dividend; 33 consecutive years and counting. This makes it a Dividend Aristocrat, which is an S&P 500 company that has raised its annual dividend for at least 25 consecutive years.
In early April, the company paid a quarterly dividend of $1.02 per share, or $4.08 per share. At current prices, this translates into a forward dividend yield of 1.19%. This is up 5.1% from the previous quarterly payout of $0.97 per share. (Source: “Chubb Limited Board Will Recommend 33rd Consecutive Annual Dividend Increase to Shareholders at the 2026 Annual General Meeting; Declares Quarterly Dividend,” Chubb Limited, February 26, 2026.)
CB Stock Hits Record High
In addition to a reliably growing dividend, CB stock has been rewarding buy-and-hold investors for decades. Over the last five years, with dividends reinvested, the total shareholder return is 119%. Without reinvesting dividends, that number drops to 103%.
The further out you go, the more pronounced the difference gets. Over the last 10, 15, and 20 years, the total returns have been 235%, 575%, and 852% respectively.
Not adjusted for dividends, and the total returns slip to 178%, 397%, and 526%. Respectable returns and better than what the S&P 500 has done, but not nearly as well as when you reinvest your dividends.
Chubb continues to do well over the near term too. On March 2 it hit a new record high of $345.67. The war in Iran has rattled markets but CB stock continues to do well, trading at $327.40. It’s still trouncing the S&P 500 too, which is down 4.2% year to date. CB on the other hand is up:
- 5% year to date
- 14% over the last six months
- 21% year over year
Wall Street thinks CB stock will hit additional highs over the coming quarters, with analyst’s providing a 12 month share price average of $331.90 and high target of $385. This points to potential upside of 1.5% to 17.7%.
Admittedly, some will balk at the company’s current $327.40 share price, but fortunately, most brokerages allow for partial shares.
Chart courtesy of StockCharts.com
The Lowdown on Chubb Limited
Chubb is the world’s largest publicly traded P&C insurer with the underwriting profits to prove it. It has a global footprint that attracts large corporate insurance customers; one that creates a barrier to entry for potential competitors.
The insurer reported record fourth quarter and full-year 2025 results, it’s stock recently hit a record high with bullish calls for fresh highs over the next year, and it’s Board recently raised its annual dividend for a 33rd consecutive year in April.
Moe Zulfiqar