Chubb's Attractive Valuation and Strong Earnings Momentum in Q2 2025

Investors seeking value in the insurance sector need look no further than Chubb (NYSE: CB). The company's Q2 2025 results have ignited a wave of analyst upgrades, robust earnings outperformance, and a valuation that screams bargain compared to its peers. Let's break down why this global insurer is a compelling buy for both growth and income-focused portfolios.

Earnings Outperformance: A Track Record of Resilience

Chubb delivered a stunning Q2 2025 performance, with core operating earnings per share (EPS) of $6.14, crushing the $5.98 analyst estimate and marking a 14.1% year-over-year increase. This wasn't a one-off win—Chubb has exceeded Wall Street's expectations in four consecutive quarters, proving its mettle in a challenging macroeconomic environment.

The secret sauce? Disciplined underwriting and a diversified global footprint. Net premiums written grew by 6.3% year-over-year to $14.2 billion, driven by double-digit gains in Latin America and Europe. The property & casualty (P&C) combined ratio improved to 85.6%, a sign that Chubb is managing claims costs and pricing effectively. Even in North America agriculture—a segment hit by weak commodity prices—the combined ratio shrank from 94.4% to 89.1%, showcasing management's agility.

Analyst Upgrades: A Consensus of Confidence

Recent analyst ratings have painted a bullish picture. While J.P. Morgan's Jimmy Bhullar maintains a cautious “Hold” with a $321 price target, the broader consensus is a “Moderate Buy”, with 17 analysts assigning a mix of 2 “Strong Buy,” 7 “Buy,” and 7 “Hold” ratings. The average price target of $307.13 implies a 11.67% upside from the current price of $275.03.

What's driving this optimism? Chubb's 17.6% annualized return on equity (ROE) and 21.0% core operating return on tangible equity (ROTE) are industry-leading metrics. Analysts are also impressed by the company's $1.2 billion in share repurchases over the past year and a 3.2% dividend yield, which has been hiked to $0.97 per share.

Undervaluation: A Price Too Good to Pass Up

Chubb's valuation metrics are screaming “buy.” As of July 2025, the stock trades at a trailing P/E of 15.31 and a P/B ratio of 1.75, significantly lower than peers like Progressive (PGR, 49.04 P/E) and American Tower (AMT, 85.67 P/E). Even conservative insurers like Travelers (TRV, 17.80 P/E) and AIG (10.55 P/E) trade at wider multiples, despite weaker underwriting discipline.

This undervaluation is further amplified by Chubb's $174.07 book value per share and a 17.6% ROE, which outpace the industry average. At 1.75x book value, Chubb is priced like a utility, not a high-margin global insurer with a 13.6% outperformance over the S&P 500 in the past year.

The Case for an Immediate Buy

Chubb's combination of strong earnings momentum, attractive valuation, and upgraded analyst ratings makes it a standout in the insurance sector. While short-term headwinds like catastrophe losses and rate compression exist, the company's $1.1–$1.2 billion annual tech investment and $5 billion share buyback signal long-term confidence.

For investors, the math is simple: Chubb's current valuation offers a 11.67% potential upside to $307.13, while its 3.2% yield and capital-return focus provide downside protection. With 80% of its businesses showing growth prospects and a “Moderate Buy” consensus, now is the time to act before the market fully prices in this insurer's resilience.

Bottom Line: Chubb is a rare blend of operational excellence, undervaluation, and analyst confidence. For those seeking a high-quality, income-generating play on the insurance sector, this is a stock that checks all the boxes. Buy it today and hold for the long term.