That however, wasn’t the stock that jumped out at me when I looked at the firm’s latest release. I was much more interested in a bigger investment in a different company. 

Insurance 

When Berkshire started investing in Chubb (NYSE:CB) in 2023, the firm asked to withhold it from their 13F filing. This gave them time to build a position without the market seeing.

While people were speculating about what the stock might be, Chubb wasn’t a name that I heard mentioned. But it’s one of those cases where it all just made so much sense after.

Chubb’s an international insurance business headquartered in Switzerland. And it’s the kind of operation that a company like Berkshire is well-placed to appreciate.

Over the last five years, it’s been the outstanding name in the industry in terms of margins and profitability. And the business appears to be going from strength to strength.

Durable strength 

Over the last five years, Chubb’s achieved profit margins close to 11% while the rest of the industry has mostly broken even. And it reached new highs in 2025 at around 15%.

That’s hugely impressive and it’s built on a few key competitive strengths. The first is the firm’s focus on underwriting discipline over volume and not chasing growth at any price.

Another is the company’s cost structure. Chubb’s recently been working hard to automate as much of its claims process as possible, bringing down expenses and boosting margins.

On top of this, the firm’s immense scale allows it to spread its fixed costs across a huge premium base. These are some major advantages and I think it’s hard to see them going away any time soon. 

Risks

It’s easy to see why Chubb stands out to Berkshire Hathaway. It has durable competitive strengths in an important industry that Buffett’s company is very familiar with.

There are though, some important risks to consider. In fact, the insurance industry is all about assessing and taking on risk and that’s the case with Chubb as much as any other carrier.

The company has an outstanding track record in this regard. But I think the rise of AI brings with it some unique threats that are going to be especially difficult to assess accurately.

Chubb’s disciplined approach and diversified strategy might help it to mitigate this kind of risk better than its rivals. But it isn’t something investors can afford to just ignore entirely.

Should I buy?

Berkshire’s latest investment in Chubb isn’t the classic blood-in-the-streets opportunity that Buffett’s famous for. The stock didn’t really crash during the first three quarters of 2025.

In other ways though, it’s a clear case of the approach Buffett has advocated for. It’s a case of buying shares in a wonderful business at a fair price, rather than the other way around.

I’ve thought about buying the stock for my portfolio before. But I decided that I could find a company with the same sort of advantages much closer to home in the FTSE 100.

The post 1 stock Warren Buffett’s firm has been buying appeared first on The Motley Fool UK.

Berkshire Hathaway has quietly built a position in Chubb worth over $6.7bn, as revealed in its latest 13F filing. That makes Chubb one of Berkshire’s largest publicly traded insurance holdings, alongside its wholly owned businesses like GEICO and Gen Re. The move is no coincidence — Buffett has long favoured insurance as a foundation for Berkshire’s business model, thanks to a unique financial advantage.

Float

Insurance companies collect premiums upfront and pay out claims later. This time gap allows insurers to invest the premiums, or ‘float’, and generate returns. Few understand how to manage this capital as well as Buffett. When deployed wisely, float can supercharge long-term gains.

Chubb stands out in this field. It’s one of the world’s largest publicly traded property and casualty insurers, with a reputation for underwriting discipline and risk management. Unlike some rivals, it has consistently delivered profitable growth, even in volatile markets. Its property/casualty (P&C) combined ratio — a key measure of profitability in insurance — remains below 90%, indicating strong operational efficiency.

The timing of Buffett’s investment is also notable. With interest rates at multi-decade highs, insurers with conservative balance sheets and large bond portfolios stand to benefit. As older, lower-yielding bonds mature, insurers can reinvest at higher rates, boosting income without taking on excessive risk. This is an environment tailor-made for old-school insurers with staying power, making Chubb a stock worth considering right now.

Dividends and buybacks

Chubb also has a surprisingly impressive dividend policy for a US company. It has increased its dividend for 31 consecutive years and regularly buys back shares, affirming its dedication to shareholders. While its yield is modest at just over 1.4%, its track record of total returns over the long term is far more compelling.

For Buffett-style investors, this strategy should be familiar: buying high-quality businesses at fair prices and holding them for decades. Unlike tech stocks, where sentiment can swing wildly, insurance offers stability, predictable cash flow and long-term compounding — core tenets of the Berkshire playbook.

Sector-specific risks

For UK income investors, this news warrants a closer examination of domestic insurers. Companies like Aviva and Legal & General offer higher yields and play similar roles in a portfolio focused on long-term cash generation. While not exact parallels, they operate in the same rate-sensitive sector and could benefit from the same macro tailwinds Buffett is eyeing.

However, investors should also be mindful of the risks. Like all insurers, Chubb is exposed to unpredictable claims events such as natural disasters or litigation surges, which can impact profits. And while its global footprint offers diversification, it’s also at risk from regulatory and geopolitical complexity, including foreign exchange fluctuations, rate changes, legal challenges and bond market volatility.

Ultimately, Chubb may not make headlines like Apple or Amazon, but its inclusion in Berkshire’s portfolio speaks volumes. In a world that chases growth at any price, Buffett’s quiet bet on an insurance stalwart is a reminder that quality, value and patience never go out of style.

The post Why Warren Buffett’s bet on Chubb could be his most underrated move in years appeared first on The Motley Fool UK.

The company’s latest release reveals that stock to be Chubb (NYSE:CB). It’s tempting to try and do the same (as many are) but I think there’s a better way to invest like Buffett.

What is Chubb?

Like Berkshire Hathaway, Chubb operates in the insurance industry. Over half the firm’s revenues come from its property & casualty operations in the US. 

Insurance businesses can make money by investing the cash customers pay to earn a return. Doing this well over a long period of time has been the secret to Buffett’s success.

The thing is, this only works if the company’s underwriting is sound. It doesn’t matter if an insurer has great investments if it has to keep selling them constantly to settle claims.

Underwriting well is what gives insurance businesses opportunities to make money through investments. And this is an area where Chubb excels.

Combined ratio

The Combined Ratio is a key metric in insurance. This measures how much a company pays out in costs and claims as a percentage of the premiums it collects. 

On average, US insurers have managed a Combined Ratio of 97.5% over the last 10 years. This implies their underwriting hasn’t done much more than break even.

Chubb Combined Ratio vs. Peers 2014-23

Source: Chubb Corporate Presentation Q4 2023

Chubb, however, has done much better. Each year, tts underwriting has outperformed the wider industry, achieving an average Combined Ratio of 89.9%.

That makes Chubb an unusually good business. And at a price-to-earnings (P/E) ratio of around 12, its stock is trading at a significant discount to the S&P 500 average.

Should I buy the shares?

Buying shares in Chubb might be a good idea for someone like Warren Buffett. Berkshire’s insurance operations give its CEO an unusually good insight into the insurance industry.

It’s different for other investors, though. Not having a similar background in the sector makes buying the stock significantly more risky for someone like me.

Buffett investing in Chubb is clearly a positive sign, but the share price is now higher than it was when Berkshire was buying. And what if something changes with the business?

If I buy the stock just because the billionaire investor did, I won’t know how to react if things change and it could be months until I find out what Berkshire has done. That makes Chubb risky for me.

What about Berkshire Hathaway?

Buying shares in Berkshire Hathaway is the best way of investing like Warren Buffett, I feel. No guessing at which stocks, no trying to understand why, and no wondering when to sell. 

It comes with the risks of owning the company’s other subsidiaries. This includes the threat of regulation associated with its utilities business and the railroads.

Berkshire’s culture and balance sheet reduce the risk of permanently losing money, though. It’s the largest stock in my portfolio and one I plan to continue buying.

The post Here’s what investors need to know about the latest Warren Buffett stock appeared first on The Motley Fool UK.