In a deal that will expand its Asia book to $7 billion in net premiums, Chubb announced a definitive agreement to acquire some life and non-life insurance companies from Cigna in seven Asia-Pacific markets.
Chubb will pay $5.75 billion dollars in cash for the companies, which house the personal accident, supplemental health and life insurance business of Cigna in these markets, expanding Chubb’s footprint in the regions from $4 billion to $7 billion in net premiums written—or 20 percent of Chubb’s global portfolio (excluding China).
In the A&H businesses, Chubb’s global premiums will grow to $6.1 billion from $3.7 billion, and it’s Asia life company premiums will rise to $4 billion from $1 billion, Chubb said in a media statement.
Chubb referred to the deal as a “highly complementary transaction” that advances the Zurich-based company’s strategy to expand its presence into a long-term growth area for the company—the Asia-Pacific region—while also adding to its already sizable A&H business.
“The addition of Cigna’s business, which is overwhelmingly A&H, will further balance our global portfolio toward this important region,” said Evan G. Greenberg, chairman and chief executive officer of Chubb, in a media statement.
The operations to be acquired include Cigna’s A&H and life business in Korea, Taiwan, New Zealand, Thailand, Hong Kong and Indonesia and its interest in a joint venture in Turkey.
Over 80 percent of the premiums from the business to be acquired are from supplemental A&H products. Together, post-deal, A&H and life will comprise 21 percent of the Chubb’s overall premium revenue compared to 14 percent today.
Greenberg said, “We have long admired and respected Cigna’s business in Asia, including its talented people, innovative products, technical and analytical capabilities, distribution and management.” He also said that the “digital opportunity across the region is large and untapped and suitable for [Chubb’s] direct-marketed A&H products and…consumer P/C and simple life insurance products.”
“We are looking to the future,” he continued. “Broadly across the region, Chubb will be better able to capitalize on market and product opportunities with strong brand, complementary direct marketing skills and the cross-selling of Chubb’s non-life product to life customers.”
For Cigna, the move is a step forward in a strategic plan to focus on the company’s global health services portfolio, said David M. Cordani, president and chief executive officer, Cigna Corporation.