Chubb is Warren Buffett’s Berkshire Hathaway secret stock pick

Warren Buffett finally revealed his secret stock pick in a new regulatory filing, and it’s insurer Chubb.

His conglomerate Berkshire Hathaway has bought nearly 26 million shares of Zurich-based Chubb for a stake worth $6.7 billion. The property and casualty insurer became Berkshire’s ninth biggest holding at the end of March.

Shares of Chubb jumped nearly 7% in extended trading following the news of Berkshire’s stake. The stock has gained about 12% year to date.

Insurer Ace Limited acquired the original Chubb in 2016 for $29.5 billion in cash and stock, and the combined company adopted the Chubb name. Evan Greenberg, CEO of Chubb, is the son of Maurice Greenberg, the former chairman and CEO of insurance giant American International Group.

The Omaha-based Berkshire has a large footprint in the insurance industry, from auto insurer crown jewel Geico to reinsurance giant General Re and a slew of home and life insurance services. The conglomerate also acquired insurance company Alleghany for $11.6 billion in 2022.

Berkshire recently exited positions in Markel and Globe Life in the same industry.

Mystery unveiled

Berkshire has been keeping this purchase secret for two quarters straight. Berkshire was granted confidential treatment to keep the details of one or more of its stock holdings confidential.

The topic of this mystery holding didn’t come up at the Berkshire’s annual meeting in Omaha earlier this month.

Many had speculated that the secret purchase could be a bank stock as the conglomerate’s cost basis for “banks, insurance, and finance” equity holdings jumped by $1.4 billion in the first quarter after an increased of $3.59 billion in the second half of last year, according to separate Berkshire filings.

It’s relatively rare for Berkshire to request such a treatment. The last time it kept a purchase confidential was when it bought Chevron and Verizon in 2020.