CB

Chubb($CB): Former Citi CEO Buys While Executives Sell - Hidden Opportunity Amid Mixed Signals?

07/28/2025 20:04

A notable stock purchase by Chubb ($CB) board member Michael Corbat on July 25, totaling $425,000, has caught investors' attention as it contrasts sharply with the consistent selling pattern by key executives over the past year, including CEO Evan Greenberg. Chubb is one of the world's largest property and casualty insurance companies, headquartered in Switzerland, providing commercial, personal, agricultural, and reinsurance products across global markets. With approximately 43,000 employees, the company maintains strong operational foundations across North America, Europe, and Asia Pacific, particularly leading in specialty insurance areas such as cyber risk and political risk coverage. Michael Corbat, former CEO of Citigroup who successfully led the bank's rebuilding after the global financial crisis from 2012 to 2021, joined Chubb's board in 2021. His extensive financial industry experience and crisis management capabilities have earned high industry trust, making his recent stock purchase particularly significant given the contrasting selling behavior of other executives. Internal trading data reveals that among 23 transactions from June 2024 to July 2025, 22 were sales with only 2 purchases. CEO Greenberg sold approximately $30 million and $7.5 million worth of shares in September 2024 and March 2025 respectively, while President John Keogh conducted large-scale sales in May and June 2025. Against this backdrop, Corbat's purchase signals positive insider sentiment about the company's current valuation level. This shift in insider trading patterns gains additional significance when considered alongside the company's recent performance. Despite suffering $1.5 billion in losses from California wildfires in Q1 2025, Chubb demonstrated strong recovery in Q2. Net investment income increased 6.8% year-over-year to $1.57 billion, while the combined ratio improved to 85.6%. Global P&C net written premiums, excluding agriculture, grew 5.8% to $11.66 billion. Chubb's stock price rose from around $262 in June 2024 to over $300 in March 2025, but has since corrected to the mid-$270s. While this represents approximately 13% below the 52-week high, the five-year total return of 101.57% demonstrates solid long-term performance. Industry-wide environmental changes are working in Chubb's favor. Increasing natural disasters and expanding cyber risks continue to drive premium increases, particularly in commercial and specialty insurance segments where Chubb holds competitive advantages. The company recently launched a $100 million excess casualty facility with Zurich and National Indemnity, demonstrating innovative product development. Financially, Chubb maintains industry-leading health metrics with a conservative 23.29% debt-to-equity ratio and substantial cash reserves of $6.88 billion ensuring adequate liquidity. The 13.63% return on equity reflects efficient capital utilization. Key factors for investors to monitor include Q3 earnings impact from California wildfires, the company's underwriting resilience, sustainability of premium increase trends, and effectiveness in capturing growth opportunities in emerging risk areas. Analysts project Q2 2025 earnings per share of $5.85, representing 8.7% year-over-year growth, with the combined ratio expected to improve to 85.2%. In an optimistic scenario, continued premium increases from natural disasters and cyber risks, combined with Chubb's superior underwriting capabilities, could drive market share expansion. Proactive responses in ESG-related insurance products and new technology risk coverage could serve as long-term growth drivers. Risk factors to consider include frequent large natural disasters, declining investment returns from lower interest rates, and reduced commercial insurance demand due to economic slowdown. Climate change-induced insurance losses present structural challenges for the entire industry. Overall, Corbat's purchase appears to signal positive insider judgment about Chubb's investment attractiveness at current price levels. While short-term focus should remain on Q3 results and natural disaster impacts, the long-term outlook appears promising given structural industry changes and the company's competitive advantages.