Chubb to buy Cigna’s A&H and Life units in Asia, Turkey
Chubb Limited has announced a definitive agreement to acquire the life and non-life insurance companies that house the personal accident, supplemental health and life insurance business of Cigna in seven Asia-Pacific markets for USD5.75 billion dollars in cash.
This transaction advances Chubb’s strategy to expand its presence in the Asia-Pacific region, a long-term growth area for the company, and adds to an already sizable A&H business while expanding the company’s Asia-based life insurance presence. Upon completion of the transaction, Asia-Pacific’s share of Chubb’s global portfolio will increase from approximately USD4 billion to USD7 billion in premium and represent approximately 20 percent of the company (excluding China). Over 80 percent of the premiums from the business to be acquired are from supplemental A&H products, further building Chubb’s leadership in global supplemental A&H, with premiums growing from USD3.7 billion to USD6.1 billion. Together, A&H and life will comprise 21 percent of the company’s overall premium revenue compared to the current 14 percent.
“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. “We have long admired and respected Cigna’s business in Asia including its talented people, innovative products, technical and analytical capabilities, distribution and management. We know these businesses well as we already have a sizable operation of our own in the region and globally. These businesses produce very stable, high-quality earnings. The digital opportunity across the region is large and untapped and suitable for our direct-marketed A&H products and our consumer P&C and simple life insurance products. We are looking to the future. Broadly across the region, Chubb will be better able to capitalise 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.”
“Our agreement with Chubb is another step forward in advancing our strategic focus on our global health services portfolio,” said David M. Cordani, president and chief executive officer, Cigna Corporation. “We are proud of our success in building these accident, supplemental and life benefits businesses in Asia Pacific and improving the well-being and sense of security of our customers throughout the region.”
Upon close, the transaction is expected to be immediately accretive to Chubb’s core operating earnings per share and return on equity (ROE) for full-year 2023 by six percent and approximately 55 basis points, respectively.
The USD5.75 billion cash consideration is not contingent upon financing. Chubb estimates that it will realise in excess of USD80 million of expense savings. The transaction is expected to be completed in 2022 and is subject to required regulatory approvals and customary closing conditions.
