Billionaire Warren Buffett is buying a “high flying” asset after significantly reducing his exposure to the US banking industry, according to a new report.
The renowned investor has sold $10.5 billion of Berkshire Hathaway’s stake in Bank of America since the summer, after selling all of the firm’s JPMorgan Chase and Wells Fargo positions in recent years.
Now, Buffett is turning his attention to a top global insurance company that specializes in property and casualty coverage.
New SEC regulator filings show Buffett is steadily buying shares of Chubb (CB), reports The Motley Fool.
The firm provides commercial and personal property and casualty insurance, as well as personal accident and supplemental health insurance, reinsurance, and life insurance in 54 countries and territories.
Berkshire initially revealed a position in Chubb in May, and has allocated $7.8 billion in the company as of June 30th.
Steady cash flow, wealthy clientele and interest rate advantages are a few reasons Buffett may be diving into the stock.
A September report from consultancy giant Deloitte found the property and casualty insurance sector is witnessing improved profitability driven by significant premium increases, reduced claims costs, and higher investment yields.
However, the report warns of ongoing pressures from climate-related losses, new tax compliance burdens and the complexity of evolving customer expectations that challenge operational models.
Chubb’s stock is up 22% year to date, with the firm’s latest quarterly report showing net income hit $2.32 billion, up 13.8%, while core operating income reached $2.33 billion, up 14.3%.
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