Is Chubb still a growth story?
Current market conditions are providing an ideal environment for Chubb to prove the growth rationale behind the 2015 merger with Ace, sister publication Inside P&C has said.
In a Property Casualty Intelligence Briefing on Chubb’s Q3 results, analysts at Inside P&C highlighted the “growth story” rhetoric at the time of the Ace-Chubb merger and questioned whether this had proven true to date.
Since the end of 2016, the enlarged Chubb’s first full year, P&C top line has increased around 13 percent versus 16 percent for Travelers, a company typically seen as a mature, slower growth and capital return-oriented company.
Since the deal closed, Chubb stock has produced a total return of 44 percent versus 71 percent for the market, and 63 percent for the SNL US Insurance Underwriter index – although it has outperformed Travelers’ 31 percent, Inside P&C noted.
“The firm is only just at the beginning of its planned growth phase from its initial deal-plan, and management has earned the right to be judged in years not quarters. Even so, given the way the market has kindly provided an accommodative environment at the exact moment to align with the firm’s growth timetable, it appears like now is as good a time as any to prove the concept,” Inside P&C said.
Inside P&C also outlines four further reasons why now is the time for Chubb to prove that growth will indeed follow its enhanced capabilities, distribution channels, and market power, created as a result of the merger deal.
For these four reasons and a full analysis on Chubb’s Q3 earnings, click here.