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  5. CB: I am thinking of adding/increasing my position in an insurance company and have found that the combined ratio for both MFC and SLF are more than 100 while CB and TSU’s combined ratio is in the low 80. [Chubb Limited]
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Q: I am thinking of adding/increasing my position in an insurance company and have found that the combined ratio for both MFC and SLF are more than 100 while CB and TSU’s combined ratio is in the low 80. Does that mean MFC and SLF are not as profitable as CB and TSU? Which is a good buy currently? Thanks,
Asked by Liping on November 14, 2024
5i Research Answer:

All of them (MFC, SLF, CB, TSU) are classified as insurance companies. The expertise that these companies focus on is completely different, MFC and SLF are more diversified in terms of the areas these two are willing to underwrite including life insurance, health insurance, annuity, etc. These sub-sectors of the insurance industry have experienced payouts more frequently than TSU and CB, which focus more on property & casualty insurance and reinsurance. The areas that TSU and CB underwrite could see years of great performance with a low loss ratio, but claims come in very infrequently and often the damage is a much larger amount. We think investors are better off evaluating TSU and CB over multiple years of underwriting practices.

Currently, we like SLF and CB the most, and while we still like TSU, it has been facing challenges to gain positive momentum. 

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