Core earnings of $7.66 a share and an 84.1% combined ratio keep the franchise intact. At $355 the stock needs about 12 times next year’s profit, which I match, for a market-like return including the dividend.
Key points
- $7.66 core operating EPS in Q3, up 0.8% year over year, with nine-month core EPS of $21.94, up 24.5%.
- 84.1% P&C combined ratio; 82.6% on a current-accident-year, ex-catastrophe basis.
- $191.43 book value per share, up 5.1% year over year, after $4.48 billion of after-tax investment marks.
The call
The $355 share price requires about $31 of 2027 core earnings at twelve times, or 1.85 times today’s book. That is a fair multiple for a 15% core return on equity and a 1.1% dividend, not a bargain.
I model $31.20 of 2027 core EPS, 6% above a $29.44 2026 run rate, at twelve times. North America commercial premiums fell 2.7% as property was cut; overseas and personal still grew. Catastrophe losses of $705 million, versus $285 million a year ago, explain the flat quarter, not a broken franchise.
P&C combined ratio by quarter (%)- Reported combined
- Ex-cat accident year
Chubb Q3 2026 release, October 20, 2026
Valuation
| Item | Figure |
|---|
| 2026E core EPS (9-mo $21.94 + Q4 ~$7.50) | $29.44 |
| 2027E core EPS (desk, +6%) | $31.20 |
| Forward P/E | 12 times |
| 12-month target | $375 |
| Book value now / implied P/B | $191 / 1.82 times on $207 book |
Twelve times matches a high-teens ROE P&C compounder after a 33% twelve-month run. Asymmetry is modest: you collect about 6% with the dividend if right and lose a similar amount if the cycle turns faster. That is a hold, not a buy.
Core operating EPS by quarter ($)- Reported core EPS
- Desk 2027 quarterly
Chubb releases through October 20, 2026; 2027E is the desk forecast
Risks
- Casualty loss costs of 6%, 12% outrun rate, lifting the underlying combined ratio above 84%.
- A large U.S. or global catastrophe quarter repeats the $705 million hit.
- Higher yields keep marking the $126 billion bond book, stalling reported book-value growth.
What would change my mind
Two consecutive quarters of North America commercial premium growth above 4% with the ex-cat combined ratio still under 83%.