Chubb Limited's New Deal Consolidates Chinese Presence

Chubb Limited CB has sealed a strategic cooperation agreement with PICC Property & Casualty Company of China. The agreement has a term of 10 years.

Per the contract, Chubb and PICC Property & Casualty will establish China Desks comprising underwriting and service centers for Chinese-affiliated enterprises in Chubb's offices across the globe. Also, Chinese companies with multinational insurance programs can have their overseas insurance needs serviced through Chubb's worldwide operations.

PICC Property & Casualty boasts being the largest property and casualty insurance company in China. The company wrote gross premiums of about $47.3 billion and exited 2016 with total assets of about $72.2 billion.

The agreement will help Chubb deploy its capabilities to cater to the insurance needs of China's largest and most successful companies. In turn, PICC Property & Casualty will be able to offer Chubb's product and services to its clients even beyond China.

Chubb has always remained focused on pursuing strategic initiatives that pave way for long-term growth. In its endeavors, the insurer aims to capitalize on the potential of middle-market businesses, both domestic and international, plus review underwriting actions in portfolios that do not meet its risk appetite as well as generate lower net premium. Subsequently, the company intends to either terminate or re-insure that business to improve risk/reward profile.

In September this year, Chubb inked a 15-year distribution deal with Singapore's DBS Bank to consolidate its Asian presence. It also shored up its Australian presence with introduction of Chubb Business Pack Insurance that provides broad coverage against property and liability exposures.

Shares of Chubb have gained nearly 12.9% year to date, outperforming the industry's rise of 11.5%. The Zacks Rank #3 (Hold) insurer expects initiatives — both organic and inorganic — undertaken in the United States, Latin America and Asia to drive improvement.

Stocks to Consider

Some better-ranked stocks from the insurance industry are NMI Holdings Inc. NMIH, Infinity Property and Casualty Corporation IPCC and Donegal Group Inc. DGICA.

NMI Holdings provides private mortgage guaranty insurance services in the United States. The company came up with a 42.86% positive earnings surprise in the previous quarter. Shares of the company have surged 54% year to date. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Infinity Property and Casualty provides personal automobile insurance products in the United States. Last quarter, the company delivered a positive earnings surprise of 1050%. Shares of the company have rallied 23% year to date. The stock sports a Zacks Rank of 1.

Donegal Group provides property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England and Southern states. The company pulled off a 78.57% positive earnings surprise in the preceding quarter. Shares of the company have inched up 1.5% year to date. The stock carries a Zacks Rank # 2 (Buy).
 

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