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Weighing Chubb’s Valuation beside Those of Other Insurance Giants

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Updated

Chubb’s valuations

Chubb (CB) reported net income of $1.16 billion in 1H16 and $2.39 billion in 1H17. For the January 2016–June 2016 period, Chubb reported operating income of $2.07 billion, while from January 2017–June 2017, the company saw operating income of $2.35 billion.

Chubb’s one-year forward PE (price-to-earnings) ratio stands at 13.15x, compared with the peer average of 12.09x, which means that Chubb is trading at a premium valuation.

The one-year forward PE ratios of Chubb’s major competitors are as follows:

  • Hartford Financial Services (HIG): 12.09x
  • Travelers (TRV): 13.07x
  • American International Group (AIG): 11.12x
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The above insurance giants could witness declines in their valuations in 2H17 due to Hurricane Irma’s devastation in Florida. AIG could witness an even more substantial decline in its valuations in 2H17 than its major insurance peers (IYF)—including Travelers, Progressive, Allstate, and Chubb—given its higher exposure to Hurricane Irma.

Another key valuation multiple

Hartford Financial Services has a PB (price-to-book) ratio of 1.12x. Its peers have the following PB ratios:

  • Travelers (TRV): 1.38x
  • Chubb (CB): 1.30x
  • American International Group (AIG): 0.73x
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