Chubb Acquires Cigna for USD 5.75 Billion ~ Insurance Academy

Chubb Limited announced an agreement to acquire life and non-life insurance company Cigna Corporation in seven countries, including Indonesia. The transaction value from the acquisition of the personal accident and health insurance business, as well as life insurance reached US$ 5.75 billion.

Chubb Chairman & Chief Executive Officer Evan G Greenberg said, “The addition of Cigna’s business, which is mostly personal accident and health insurance, will further balance its global portfolio in a number of important regions.

“We have long admired and respected Cigna’s business in Asia including its talented people, innovative products, technical and analytical capabilities, as well as distribution and management. We know the business well as we already have substantial regional and global operations. This business generates very stable and high-quality income,” Evan said in a statement quoted from the official Chubb website, last weekend.

The operations to be acquired include personal accident and health (accident & heath/A&H) and Cigna life insurance businesses in Korea, Taiwan, New Zealand, Thailand, Hong Kong and Indonesia, as well as a joint venture in Turkey. Operations in the region generated at least US$3 billion in recorded net premiums in 2020.

Evan said digital opportunities across the region are huge and untapped. This includes personal accident and health insurance products, property and miscellaneous insurance products (property and casualty/P&C), and simple life insurance products.

“We see the future. Broadly across the region, Chubb will be better able to take advantage of market opportunities and products with strong brands, complementary direct marketing skills, and cross selling non-life insurance products for the lives of customers,” he added.

The transaction will complement Chubb’s strategy to expand its presence in the Asia-Pacific region, an area of long-term growth for the company. In addition, it also adds to the already sizable personal accident and health insurance business, while expanding the life insurance business of a company based in Asia.

After the transaction is complete, the Asia-Pacific share of Chubb’s global premium portfolio will increase from around US$4 billion to US$7 billion and represent about 20% of the company (excluding China). More than 80% of the premiums from the business to be acquired come from personal accident insurance products and additional health insurance.

The acquisition of the business is seen as further cementing Chubb’s leadership in the additional insurance segment globally, with premiums growing from US$3.7 billion to $6.1 billion. Together, the personal accident insurance and health insurance and life insurance businesses will account for 21% of the company’s overall premium income compared to the current 14%.

Meanwhile, Cigna Corporation President & Chief Executive Officer David M Cordani said the agreement with Chubb is another step forward in advancing the strategic focus on the global healthcare portfolio. “We are proud of our success in building our casualty, supplementary and life insurance business benefits in Asia Pacific and enhancing the well-being and sense of security of our customers across the region,” he added.

Quoted from investor.id