Gold prices steady ahead of Fed decision; weekly weakness noted
Introduction & Market Context
Chubb Limited (NYSE:CB) delivered an exceptional fourth quarter in 2024, capping off what management described as "the best year in the company’s history." The global property and casualty (P&C) insurance leader reported core operating income of $2.5 billion for Q4, representing a 10.5% increase per share, as detailed in both its corporate presentation and recent earnings call.
With a market capitalization of $110.7 billion as of December 31, 2024, Chubb has established itself as a truly global insurer with operations in 54 countries and territories. The company’s diversified business model, conservative underwriting approach, and strategic global expansion have positioned it well despite ongoing inflationary pressures and increasing competition in certain market segments.
Quarterly Performance Highlights
Chubb’s Q4 2024 results demonstrated strength across all major business segments. The company achieved a P&C combined ratio of 85.7% for the quarter, significantly outperforming industry peers. Global P&C premium revenue grew by 6.7%, with notable contributions from both North American and international operations.
As shown in the company’s financial summary, Chubb maintains exceptional financial strength with total capital of $79.6 billion and shareholders’ equity of $64.0 billion as of year-end 2024:
For the full year 2024, Chubb generated operating income of $9.1 billion, up 11.5% on an adjusted basis. The company achieved a core operating return on equity of 14% and an impressive return on tangible equity of 21.6%. These metrics underscore Chubb’s ability to deliver superior returns while maintaining a conservative risk profile.
During the earnings call, CEO Evan Greenberg highlighted that over the past three years, "core operating income has grown over 65% and is nearly double the amount from pre-COVID 2019." This growth trajectory reflects both organic expansion and the company’s disciplined approach to risk management.
Global Reach & Product Diversity
A key strength highlighted in Chubb’s presentation is its extensive global footprint. While 57% of the business is conducted in the United States, the company has established significant operations across Asia (18%), Europe/Middle East/Africa (13%), and Latin America (6%).
The following map illustrates Chubb’s worldwide presence and the distribution of premiums, employees, and offices across regions:
This geographic diversification provides Chubb with balanced exposure to both mature and emerging markets. During the earnings call, Greenberg specifically noted the growth potential in Asia, where economic expansion is "multiples of what we’re seeing in the West," creating opportunities as middle-class populations increase.
Complementing its geographic reach is Chubb’s diverse product portfolio, which spans commercial P&C, personal lines, accident and health, agriculture, and reinsurance. The presentation highlighted the distribution of premiums across these segments:
This product diversity allows Chubb to navigate varying market cycles and capitalize on growth opportunities across different segments. For Q4 2024, the company reported particularly strong performance in its middle market and small commercial businesses, as well as in personal lines, which grew by 10% in North America.
Underwriting Excellence & Investment Approach
Chubb’s presentation emphasized its underwriting expertise as a core competitive advantage. The company has consistently outperformed industry peers in terms of P&C combined ratio across multiple time periods, as illustrated in this comparative analysis:
This superior underwriting performance reflects Chubb’s disciplined approach to risk selection and pricing. During the earnings call, Greenberg reinforced this philosophy, stating: "We’re not going to write insurance where we cannot achieve a reasonable risk-adjusted return for taking the risk."
On the investment side, Chubb maintains a conservative approach with 81% of its $150.7 billion portfolio allocated to fixed maturity securities. The portfolio has an average credit quality of A and a duration of nearly five years. The following charts detail the composition by credit quality and asset type:
This conservative investment strategy has delivered consistent results, with adjusted net investment income reaching a record $1.7 billion in Q4 2024, up 13.7% from the previous year. The fixed income portfolio yield stood at 5% versus 4.8% a year earlier, with new money being invested at an average rate of 5.6%.
Strategic Positioning & Outlook
Looking ahead to 2025, Chubb’s management expressed confidence in the company’s growth prospects. The presentation highlighted the strength of its leadership team, which brings decades of industry experience to guide the company’s strategic direction:
During the earnings call, Greenberg identified several growth areas for 2025, including middle market and small commercial businesses globally, U.S. excess and surplus lines, high-net-worth personal lines, global accident and health, and the company’s digital and "Climate Plus" businesses.
However, Chubb also faces challenges, particularly in the California insurance market. Greenberg noted that the company has reduced its exposure in California’s wildfire-prone areas by over 50%, calling the state’s current insurance model "unsustainable." The company estimates a $1.5 billion net pre-tax loss from the recent California wildfires, which will be recorded in Q1 2025.
Competition is also increasing in certain segments, particularly in financial lines and large account, shared, and layered property. Despite these headwinds, Chubb’s diversified business model and strong capital position provide resilience and flexibility to navigate market challenges while pursuing strategic growth opportunities.
In conclusion, Chubb’s Q4 2024 presentation portrays a company with strong fundamentals, global reach, and a consistent track record of outperformance. As Greenberg summarized during the earnings call: "We have good momentum and are optimistic about the year ahead, both top and bottom line, cat losses and FX notwithstanding."
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.