Buying An Insurer: I'm Afraid Of Global Warming But Chubb Isn't

 

Photo by Rahull J Young via Creative Commons and Flickr

I had to add to my Chubb (CB) position.  This property and casualty company is so cheap at a p/e of 8.  They've had this low p/e for years as the stock has climbed.  People are worried that global warming and terrorism mean that there is another unexpected disaster out there that will hurt insurance companies.  While global warming is bad for me, you, the planet, the oceans, all the species that will go extinct and ski resorts; global warming will not hurt the insurance industry.  They are pricing global warming into their policy prices and actuarial models.  The market is wrong to think that global warming will hurt insurers.

 Another plus in Chubb's favor is their ongoing share buyback.  They realize the stock is cheap and are rewarding those shareholders who hang on. 

Disclosures and Confessions:  I own Chubb.  I have owned CB for over 2 years.  I insure my NY condo with Chubb.  Their insurance is expensive but I hear the have a reputation for being very quick to pay when the time comes.  I have never made a claim against my Chubb insurance policy.  I also own Berkshire Hathaway (BRK/A) for many of the same reasons mentioned above.

Disclaimer:  Nothing in this blog is meant to be specific financial advice or a recommendation to buy or sell.  I do not give investment advice.  Do your own research.  Do not rely on anything in this weblog to make investment decisions.  I do not log all my trades here. I only describe or mention those that I think might be interesting. Consult an investment professional familiar with your specific financial situation before buying or selling any security.