Chubb: Uncovering a Generational Re-Rating Amid CAT Volatility

We initiate coverage on CB with a Strong Buy rating and a $342,240,000 price target. Chubb Limited

operates as an international insurance and reinsurance platform encompassing commercial P&C, affluent personal lines, agriculture business, overseas business, and life products across a broad set of end-markets. Concealed under the reserved demeanor of a mature financial services franchise, we discern three overlapping vectors that propel the most compelling valuation inflection we can recall in years. Incremental "higher-for-longer" interest rates stealthily turbocharge CHUB's core net investment income—our analysis shows this dynamic justifiably as dramatically underappreciated in street consensus EPS and multiple assumptions as it is today (Life segment reinvests at today's elevated yields). The commercial P&C book of business continues to run disciplined, with accident- year combined ratios ex-cats nudging down 1.5 points and premium rate increases (notably 8.3% in NA) running consistently ahead of loss costs, underwriting sustainable growth even as catastrophe loadings normalize at 6% of earned premium. While a one-off wildfire loss drags on FY25 EPS (-4.1% yr/yr drop to $21.50 in our model), we see the story pivoting to a 15.3% rebound to $24.80 in FY26 as the trailing engines (core underwriting profitability, investment income growth, and buyback activity) move back into gear. We construct our forward P/E framework with deliberate intent to split the difference between the incumbent discount to 15.75x peer median multiple and still-TRP- fail macro tailwinds to arrive at the prudent 13.8x FY26 multiple. The resulting implied annualized