Chubb's (CB) margins for the company's flagship commercial business in North America are peaking and growth will likely come under pressure, Deutsche Bank said in a note Tuesday.

"As a leading underwriter of large commercial risk, Chubb faces outsized exposure to the insurance pricing cycle, where rates have already begun to fall in key lines," the note said.

Deutsche said that in the last six months, pricing for large accounts has decreased, while pricing for small and mid-sized accounts is still strong, which "creates a near- to medium-term headwind for Chubb, due to its significant exposure to large accounts."

The investment firm added that Chubb's valuation which is "trading above historical average, does not provide sufficient margin of safety to compensate for the risk of owning the stock in the early stage of a softening cycle."

Deutsche downgraded Chubb to hold from buy and cut the company's price target to $303 from $319.

Chubb shares were down 0.6% in recent trading.

Price: 292.58, Change: -2.00, Percent Change: -0.68