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Investors Business Daily
Investors Business Daily

Breakout Watch: Insurance Giant Expands As Growth Accelerates

Based in Switzerland, Chubb is the world's largest publicly traded property and casualty insurance company. Boosted by two quarters of accelerating growth and the acquisition of part of Cigna, it aims to ensure a new breakout move.

As Chubb tests a handle buy point, the stock has secured a spot on IBD Leaderboard.

In Stock Checkup, Chubb holds an 89 Composite Rating, indicating that it's outpacing 89% of all stocks in terms of key fundamental and technical traits.

Kinsale Capital leads the Insurance-Property/Casualty/Title industry group with a 96 Composite Rating. Other top-rated insurance companies include RLI, W.R. Berkley and Arch Capital.

Chubb Expands In Asia-Pacific With Cigna Deal

In addition to its massive presence in the property and casualty insurance market, Chubb is also the leading commercial lines insurer in the U.S.

With operations in 54 countries and territories, the company provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a wide group of clients.

Chubb maintains executive offices in Zurich, New York, London, Paris and elsewhere. The insurer employs roughly 34,000 people worldwide. A component of the S&P 500 index, it has more than $200 billion in assets and reported $46.8 billion of gross premiums written in 2021.

In July, Chubb completed its acquisition of Cigna's personal accident, supplemental health and life insurance business in six Asia-Pacific markets.

Earlier this month, Chubb received regulatory approval to increase its stake in Chinese insurer Huatai. The China Banking and Insurance Regulatory Commission will allow Chubb to increase the company's ownership in Huatai Insurance Group from 47.3% to 83.2%. Huatai's insurance operations have more than 700 branches, 23,000 agents and about 19 million customers in China.

Chubb Posts Accelerating Sales Growth

In late October, Chubb reported its second straight quarter of accelerating revenue growth. Revenue rose 12% to $12.1 billion. Wall Street sees earnings growing 23% to $15.47 a share this year and up 17% in 2023.

Chubb also pays a dividend, currently yielding 1.5% on an annualized basis.

In a sign of institutional demand, 58 funds with an "A+" rating from IBD own shares in CB stock. The Fidelity Contrafund mutual fund also has a position in Chubb.

CB Stock Finds Support For New Run

After bullishly finding support at the 21-day exponential moving average earlier this month, Chubb is testing a 216.10 buy point in a handle.

While still shy of its 52-week high, the relative strength line for CB stock has trended sharply higher in the second half of November.

As Chubb tests its new buy point, that puts it on the verge of possibly breaking out of a long consolidation that started in late March.

Meanwhile, insurance industry peer Kinsale Capital is extended from a breakout on Oct. 28. Cigna has also climbed out of buy range from the buy point it first cleared in July.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.

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