Progressive vs. Chubb: Which Insurer is a Safer Long-Term Play?

The insurance industry is set for continued growth, driven by a focus on personalized offerings and enhanced customer experiences through digital transformation. Rising awareness is fueling greater demand for insurance products. Strong customer retention, expanding exposure across business lines and improved pricing strategies are contributing to premium growth and enabling insurers to sustain profitability. The Progressive Corporation PGR and Chubb Limited CB — two of the largest U.S. insurers — are expected to grow, banking on these positives.

To safeguard the balance sheet, insurers are increasingly seeking reinsurance arrangements. Climate risk modeling is also helping a lot. Insurers’ pricing is thus influenced by higher reinsurance costs and more restrictive terms, as well as higher inflation. 

Yet, as an investment option, which stock is more attractive? Let’s closely look at the fundamentals of these stocks.

Factors to Consider for PGR

Progressive Corporation is one of the largest auto insurers in the United States, holding the top spot in commercial auto and leading the market in motorcycle and boat coverage. Additionally, it ranks among the top 15 homeowners insurance providers by premiums written. While auto insurance remains its primary revenue driver, Progressive is actively broadening its footprint in homeowners and commercial insurance. Its growth strategy emphasizes bundling auto policies, reducing exposure to high-risk properties, and improving segmentation through tailored product offerings.

Keeping pace with industry evolution, Progressive has heavily invested in digital transformation and AI technologies. Its Snapshot program, which supports usage-based pricing, enhances its market competitiveness. The company’s expanding product suite continues to drive business growth, supported by a consistent rise in policy life expectancy—a key indicator of customer retention—across all lines.

Progressive’s underwriting discipline stands out, with a decade-long average combined ratio under 93%, outperforming the industry’s average of above 100%. This reflects solid underwriting practices and favorable reserve trends. Its comprehensive reinsurance strategy mitigates the financial impact of catastrophic weather events, safeguarding its balance sheet.

Progressive’s net margin has expanded by 950 basis points over the past two years, driven by increased demand for auto insurance and sound risk management. Healthy cash flows fund ongoing investments in technology and operational improvements. 

Though leverage is higher than the industry average, Progressive’s strong times interest earned ratio indicates robust debt servicing capacity. Its return on equity of 33.5% significantly surpasses the industry average of 7.8%, highlighting its strong financial outperformance.

Factors to Consider for CB

Chubb ranks among the world’s leading providers of property and casualty insurance and reinsurance, and stands as the largest publicly traded P&C insurer by market capitalization, valued at $114.5 billion. Its well-balanced portfolio across commercial and personal lines—spanning North America, Asia, Europe, and Latin America—positions the company to capture sustained premium growth across both developed and emerging markets.

The commercial P&C segment continues to deliver strong performance, outpacing peers thanks to favorable pricing dynamics, robust new business volumes, and high renewal retention. Simultaneously, Chubb’s high-net-worth personal lines business offers a steady and profitable source of income. Chubb is focusing on cyber insurance, which has immense room for growth. 

On the technology front, Chubb has made significant advancements, embracing embedded digital insurance solutions and implementing global automation strategies. The integration of AI and digital tools is enhancing underwriting accuracy, elevating customer experience, and driving operational efficiencies.

Over the past two years, Chubb’s net margin has improved by 980 basis points, a result of prudent underwriting and sound reserving practices. Its disciplined capital management strategy supports long-term growth while consistently returning value to shareholders through dividends and share repurchases. With a return on equity of 12.4%, Chubb exceeds the industry average, underscoring its strong financial position.

Nevertheless, its heavy reliance on the commercial insurance sector exposes it to operational and market cyclicality. Additionally, rising global reinsurance costs could exert pressure on future profitability.

Estimates for PGR and CB

The Zacks Consensus Estimate for PGR’s 2025 revenues and EPS implies a year-over-year increase of 16.6% and 10.5%, respectively. EPS estimates have moved 2.5% northward over the past 30 days. PGR has a Growth Score of A.

On the other hand, the Zacks Consensus Estimate for CB’s 2025 revenues implies a year-over-year increase of 6.3%, while the same for EPS indicates a decline of 5.8% year over year. EPS estimates have moved 0.2% southward over the past 30 days. CB has a Growth Score of D.

Are PGR and CB Shares Expensive?

Progressive is trading at a price-to-book multiple of 5.33, above its median of 4.77 over the last five years. Chubb’s price-to-book multiple sits at 1.62, above its median of 1.55 over the last five years.

Conclusion

PGR remains focused on increasing the share of auto and home-bundled households, investing in mobile applications and rolling out products in a higher number of states to drive growth.  Travelers is set to gain from continued strong renewal rate change, retention and an increase in new business. Underwriting excellence and solid investment income drive its earnings. 

Both these insurers have weathered cost challenges well, as evident from their continued net margin improvement.

Yet, on the basis of return on equity, which reflects a company’s efficiency in generating profit from shareholders' equity as well as gives a clear picture of the company's financial health, PGR scores higher than CB.  Progressive has a VGM Score of A while Chubb carries a VGM Score of C.

PGR shares have gained 30% in a year and outperformed the industry, while those of Chubb have gained 8.6% and underperformed the industry. Though PGR and CB carry a Zacks Rank #3 (Hold) each, PGR seems a safer bet.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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