Warren Buffett's Favorite (Chubb) vs. Travelers: Which P&C Stock Offers a Better Long-Term Investment Case in 2025?

The property and casualty (P&C) insurance sector remains a cornerstone of defensive investing, but 2025 has brought new challenges: escalating catastrophe risks, softening pricing environments, and the need for technological reinvention. Two titans-Chubb (CB) and Travelers (TRV)-have emerged as top contenders, yet their strategies diverge in critical ways. This analysis evaluates their long-term investment potential through three lenses: underwriting discipline, pricing power, and earnings resilience amid catastrophe risks, drawing on Q3 2025 results and broader strategic trends.

Underwriting Discipline: Chubb's Margin Mastery vs. Travelers' Risk Mitigation

Chubb's Q3 2025 performance underscored its dominance in underwriting discipline. The company reported a record $2.26 billion in P/C underwriting income, driven by a combined ratio of 81.8%-a metric that reflects its ability to control losses and expenses, according to Insurance Journal. Catastrophe losses plummeted to $285 million, down from $765 million in Q3 2024, a reduction attributed to favorable weather patterns and improved prior period reserve development, as noted in Reinsurance News. Chubb's CEO, Evan Greenberg, emphasized the company's focus on "disciplined growth" and geographic diversification, with overseas premiums rising 9.7% year-on-year, according to Chubb Investor Report.

Travelers, meanwhile, demonstrated resilience through proactive risk management. Catastrophe losses fell to $402 million in Q3 2025 from $939 million a year earlier, lifting net income by 50% to $1.9 billion, as reported by Insurance Journal. Its combined ratio improved to 87.3%, with personal lines seeing an 11.2-point improvement to 81.3, as detailed in Travelers Investor Report. Travelers' strategy hinges on advanced analytics and climate modeling, including proprietary tools for wildfire and flood risk assessment, according to Travelers Climate Strategy. While its combined ratio remains higher than Chubb's, its focus on dynamic underwriting-leveraging annual policy renewals to adjust pricing-positions it to adapt to emerging threats.

Pricing Power: Chubb's Global Reach vs. Travelers' Tech-Driven Innovation

Chubb's pricing power is anchored in its global footprint and specialty insurance expertise. In Q3 2025, P/C net premiums written rose 5.3% to $12.93 billion, with North America and overseas markets growing 4.4% and 9.7%, respectively, according to Chubb Investor Report. Despite a 2.3% decline in cyber insurance premiums in 2024, Chubb retained its leadership in the U.S. cyber market, securing $560.3 million in direct premiums, according to Reuters. Its ability to balance traditional lines with high-growth specialties (e.g., cyber, marine) reflects a diversified pricing strategy.

Travelers, however, is redefining pricing through technology. The insurer's acquisition of insurtech firm Corvus has streamlined operations and expanded its cyber insurance portfolio, which grew 39.1% to $535.4 million in 2024, as reported in Reuters. Travelers also partners with academic institutions like Kennesaw State University to advance AI-driven underwriting models, according to Travelers Climate Strategy. These innovations enable granular risk assessments, allowing the company to price policies more accurately in volatile markets. For example, its climate models incorporate terrain slope and vegetation density to refine wildfire risk pricing, as noted in Travelers Climate Strategy. While Chubb's global scale is a strength, Travelers' tech-first approach may offer superior agility in a rapidly shifting risk landscape.

Earnings Resilience: Buffett's Endorsement vs. Travelers' Shareholder Returns

Chubb's earnings resilience is bolstered by Warren Buffett's Berkshire Hathaway, which has long championed its conservative underwriting and capital efficiency. In Q3 2025, Chubb's core operating income surged 29% to $3 billion, with EPS rising 31% to $7.49, according to GuruFocus. Its investment portfolio also delivered $1.78 billion in adjusted net investment income, reflecting strong fixed-income returns. However, Chubb's reliance on traditional lines exposes it to prolonged soft markets, where pricing pressures could erode margins.

Travelers, by contrast, has prioritized shareholder returns. In Q3 2025, it returned $878 million to shareholders via buybacks and dividends, repurchasing 2.3 million shares at $628 million, as detailed in Travelers Investor Report. Its book value per share rose 16% to $141.72, and adjusted book value climbed 8% to $150.55, according to Travelers Investor Report. While its earnings growth (50% net income increase) is impressive, Travelers' dividend yield (2.4% as of November 2025) trails Chubb's 1.8%, which may appeal to income-focused investors, as noted in Travelers Investor Report.

Catastrophe Risk Resilience: A Tug-of-War Between Strategy and Geography

Both insurers have strengthened catastrophe risk resilience, but their approaches differ. Chubb's lower losses in Q3 2025 were partly due to favorable weather and disciplined exposure management, particularly in its overseas operations, according to Insurance Journal. Travelers, however, has invested heavily in predictive modeling and reinsurance programs to mitigate large-scale risks, as described in Travelers Climate Strategy. For instance, its climate underwriting strategy incorporates IPCC and U.S. National Climate Assessment data to anticipate long-term trends, as noted in Travelers Climate Strategy. While Chubb's geographic diversification reduces regional volatility, Travelers' forward-looking models may better prepare it for climate-driven disruptions.

Verdict: Chubb for Stability, Travelers for Growth

Chubb's underwriting discipline and Buffett-backed capital efficiency make it a safer bet for conservative investors seeking steady returns. Its global scale and specialty expertise provide a buffer against market cycles. However, Travelers' tech-driven innovation and aggressive shareholder returns position it as a stronger growth candidate in a climate-uncertain future. For long-term investors prioritizing adaptability and reinvention, Travelers may offer the superior investment case in 2025.