Shares of property and casualty insurer Chubb (CB 2.14%) leaped out of the gate Thursday morning. Early on, they were up by as much as 6.6%, and though that gain moderated as the session progressed, they were still up by 3.4% as of 11 a.m. ET. The insurer can thank Warren Buffett for the surge of attention.

After the close of trading on Wednesday , the famed billionaire investor revealed in a Securities and Exchange Commission (SEC) filing that he owns $6.7 billion worth of Chubb stock. And now, everybody else in investing-land wants to buy a piece of Chubb for themselves.

What's Buffett up to?

As The Wall Street Journal reported Thursday morning, Buffett's Berkshire Hathaway (BRK.A 1.57%) (BRK.B 1.42%) had been secretly building a stake in Chubb since the second half of 2023. By law, all institutional investors managing portfolios in excess of $100 million are required to reveal all of their holdings as of the end of each quarter via their 13F Forms, which they file with the SEC. But in 2023's third and fourth quarters, Berkshire asked for and received confidentiality from the SEC with regard to its Chubb position, which it was still in the process of building. The 13F forms filed about 45 days after those quarters ended revealed that it was buying something, but not exactly what it was buying. The identity of Buffett's secret investment only became public with its first-quarter 2024 13F filing Wednesday.

At this point, Buffett's $6.7 billion stake gives him a 6.4% ownership interest in the $103 billion insurance company.

Is Chubb stock a buy?

It's no great mystery why Buffett might want to own a piece of Chubb.

Valued at just 11.2 times trailing earnings and paying a dividend that yields 1.4% at the current share price, Chubb stock is pegged on Wall Street for about a 10% long-term growth rate -- giving the stock a total return ratio almost precisely equal to the value investor's rule of thumb: 1.0. Chubb also sports an enviably low combined ratio of just 86.5 -- in other words, for every $1 in premiums it takes in, Chubb pays out only 86.5 cents in claims.

And according to historical data from S&P Global Market Intelligence, that ratio has been falling, which is to say, improving, for the last three years.

Simply put, Chubb was a bargain insurance stock hiding in plain sight. The only real mystery here is why Buffett didn't start buying it sooner -- and why so many other investors waited until he cued them to start.