2 Insurance Stocks To Buy That Keep About 16 Cents Of Eve…

On the operations front, insurance companies collect premiums and then pay out claims. The goal is to collect more in premiums, which creates an underwriting profit. The key figure on that front is the combined ratio, which looks at a company’s operating costs and claims and compares that to its premiums. A figure below 100% indicates a profit.

In the third quarter of 2026, Travelers had an underlying combined ratio of 84.1%. So, for every $1 of premiums it collected, it kept just about $0.16. Chubb’s business is far more diverse: in the U.S., it had a combined ratio of 81.3%; its foreign operations, 86.4%; and its reinsurance business, 80.7%. Depending on the business line you look at, Chubb kept $0.16 or more for every dollar of premiums it collected.

These are solid results, and each of these insurance companies is doing fairly well right now. But the real long-term opportunity comes from the float, which is supported by underwriting profits.

CB – Chubb

$354.95-$2.80 (-0.78%)

NYSE · As of 4:00 PM ET 10/21/26

Premium Feature

Moneyball Superscore82/100

Key data points

Market capMarket cap calculated using publicly traded s outstanding only. Does not include unlisted, private, or dual-class non-traded s. Implied market cap may vary.$138.02B

Day’s range$351.61 – $357.29

52wk range$272.20 – $365.91

Volume2.3M

Avg volume1.7M

Dividend yield1.11%

The float creates a long-term income stream

Insurance premiums are paid up front, but claims are paid further down the road. In between, insurance companies can invest the money. Travelers’ investment portfolio is worth $100 billion. Chubb’s portfolio is $172 billion.

Both are fairly conservative with their investment portfolios, with a heavy focus on bonds. That’s a near-term issue, since bond prices fall when interest rates and yields rise, as they are today. However, insurance companies often hold bonds to maturity, so this may not be as big a long-term problem as it ly seems right now. Meanwhile, Travelers generated nearly $1.1 billion in investment income in the second quarter of 2026, while Chubb’s investment income was over $1.7 billion. While both companies have sizable investment operations, their insurance businesses incur much higher costs. If you take a back-of-the-envelope look, investment income accounted for more than half of each company’s net income.

TRV – Travelers Companies

$398.95+$3.22 (+0.81%)

NYSE · As of 4:00 PM ET 10/21/26

Premium Feature

Moneyball Superscore83/100

Key data points

Market capMarket cap calculated using publicly traded s outstanding only. Does not include unlisted, private, or dual-class non-traded s. Implied market cap may vary.$82.54B

Day’s range$394.16 – $399.71

52wk range$264.25 – $399.71

Volume1.7M

Avg volume1.6M

Dividend yield1.19%

Producing an underwriting profit allows the companies to build their investment portfolios and fully benefit from that income. It gives the companies the wherewithal to further expand their operations, which also helps to grow their investment portfolios. At the end of the day, the investment income Travelers and Chubb generate is the long-term flywheel that makes their businesses so attractive. But the funnel starts with strong underwriting results.

Best suited to growth-minded investors

Wall Street isn’t ignoring the success that Travelers and Chubb have achieved. Both companies are trading at price-to-book ratios above their five-year averages. Value investors probably won’t be interested. Their dividend yields are also fairly modest, with both offering just a touch over 1%. Income investors should probably look elsewhere, too.

However, given the strong underwriting results of both Travelers and Chubb, their massive investment portfolios, and their impressive investment income streams, growth investors may want to take a closer look. If they can keep their combined ratios well below 100%, the investment income flywheel should continue to grow over the long term.

Read Next

Oct 17, 2026 •By The Motley Fool Team

Travelers: 3 Key Takeaways for Long-Term Investors

Oct 16, 2026 •By Motley Fool Transcribing

Travelers (TRV) Q3 2026 Earnings Call Transcript

Oct 21, 2026 •By Motley Fool Staff

Act Now to Lower Your Taxes for 2026

Oct 21, 2026 •By Reuben Gregg Brewer

2 BDC Stocks to Buy and Hold That Earn More Than Their Regular Dividends

Oct 21, 2026 •By Jennifer Saibil

Is Berkshire Hathaway’s Greg Abel Is Changing the Script? Here’s the Latest Tech Stock He Just Bought.

Oct 21, 2026 •By Rick Orford

Forget the Anthropic IPO. Here Are 6 Stocks Worth Watching.

About the Author

Reuben Gregg Brewer is a contributing Motley Fool stock market analyst covering energy, utilities, REITs, and consumer staples. He is the former director of research at Value Line Publishing, where he rose from mutual fund analyst to equity analyst before leading all research operations. Reuben holds a bachelor’s degree in psychology from SUNY Purchase, a master’s in social work from Columbia University, and an MBA from Regis University. He has been featured as a financial expert on CNBC and in the Financial Times, Barron’s, and InvestmentNews.

TMFReubenGBrewer

Stocks Mentioned

Motley Fool Stock Advisor’s Latest Pick

Get Access

—% Avg Return

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.