Chubb Trades at Just 12 Times Earnings, Well Below the Broader Market. Is One of the World's Biggest Insurers a Bargain?

Chubb (NYSE: CB), the world's largest publicly traded provider of property, supplemental health, and casualty insurance, is a reliable blue chip stock. It's based in Switzerland, and it does business across 54 countries and territories. The current version of the company was created in 2016 after ACE Limited acquired the original Chubb and inherited its brand.

Chubb's stock has rallied 172% over the past ten years. With reinvested dividends, it delivered a total return of 226%. But at $352, it trades at just 12 times trailing earnings, compared to the S&P 500's historically high multiple of 32. It also pays a forward yield of 1.2%. So is it an undervalued, defensive stock to buy today?

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How fast is Chubb growing?

From 2016 to 2025, Chubb's revenue and EPS grew at CAGRs of 7% and 13%, respectively. That growth was initially driven by ACE's takeover of Chubb, which instantly made it a powerhouse in the property and casualty insurance market.

Chubb dominated the high-net-worth insurance market in the U.S., expanded in Asia, replaced its legacy systems with newer technology platforms, and reduced its exposure to weaker businesses rather than taking on bad risk. Its fixed-income portfolio also benefited from higher interest rates.

From 2025 to 2028, analysts expect Chubb's revenue and EPS to grow at CAGRs of 5% and 7%, respectively. That growth should be driven by the expansion of its middle-market and small commercial accounts to curb its dependence on the softer corporate property market, its deeper push into life insurance across Asia, automated underwriting services, agentic AI upgrades, and the "rolling" of its older, lower-rate fixed income investments into newer, higher-yielding ones.

Chubb also recently raised its dividend for the 33 consecutive year and authorized a new $7.5 billion buyback (equivalent to 5.5% of its current market cap). Those confident moves suggest its core businesses will continue to generate plenty of excess cash for the foreseeable future.

Is it the right time to buy Chubb's stock?

Chubb's scale, diversification, and tech-driven upgrades make it a smart stock to buy today. It has a wide moat and is well insulated from macro headwinds because its customers generally won't cancel their insurance policies to save a few dollars.

While Chubb isn't a high-growth play, it's a stable one that should generate reliable returns. That's probably why Berkshire Hathaway significantly increased its position in Chubb over the past three years, and why it still looks like a screaming bargain at these levels.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.