Warren Buffett Is Making a $6.7 BILLION Bet on Chubb (CB) Stock


  • Berkshire Hathaway (BRK-A, BRK-B) reported it has a $6.7 billion stake in insurer Chubb (CB).
  • The move was kept confidential for three quarters.
  • The move is in line with CEO Warren Buffett’s recent moves away from consumer stocks and into finance.
CB stock - Warren Buffett Is Making a $6.7 BILLION Bet on Chubb (CB) Stock

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Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) has taken a $6.7 billion stake in insurance company Chubb (NYSE:CB).

The news came in a 13F filing from chairman Warren Buffett’s company. Buffett had conditional approval to keep the purchase secret for two quarters.

Once the stake was revealed, CB stock jumped 7.5% overnight. It opened for trade this morning at $269 per share, a market capitalization of over $102 billion. Berkshire “A” shares moved up just 0.6% overnight, the more affordable “B” shares opening at $413 each.

Old Home Week

The purchase represents a return to basics for Berkshire, which is, at heart, an insurance company. Among the names it owns in the sector are GEICO and General Reinsurance (Gen Re). In 2022, it acquired Allegheny for $11.6 billion.

Over the last few years, Berkshire has been buying more finance stocks like American Express (NYSE:AXP) and Bank of America (NYSE:BAC) and trimming stakes in consumer names like HP (NYSE:HPQ) and Apple (NASDAQ:AAPL).

The new strategy has been a winner on Wall Street. Berkshire stock has climbed 27% over the last year and is up nearly 14% in 2024. Insurers have maintained profitability by passing on costs to consumers, driving inflation. Critics accuse the industry of price gouging, but insurers deny that.

Chubb made headlines in March by underwriting former President Trump’s $92 million appeal bond in the E. Jean Carroll case. CEO Evan Greenberg is the son of legendary American International Group (NYSE:AIG) CEO Maurice Greenberg, who fell spectacularly in the 2008 financial crisis. The company is built around Ace Limited, an insurer that bought the original Chubb for $29.5 billion and took its name in 2016.

Buffett could easily make a move for all of Chubb. Berkshire reported it had $182 billion in cash at the end of the first quarter. Buffett said at the company’s annual meeting he would like to spend the cash, but called a huge acquisition unlikely.

CB Stock: What Happens Next?

Expect small investors to look at insurance stocks more closely. Many swim alongside Buffett and try versions of his strategic moves in their own portfolios.

As of this writing, Dana Blankenhorn had a LONG position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

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