Chubb makes $5.75bn move for Cigna's Asia and Turkey businesses
Insurer Chubb has agreed a $5.75 billion cash deal for the life and accident and health insurance businesses of Cigna in seven markets, in a deal aimed to boost its presence in the Asia-Pacific region.
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. These businesses generated approximately $3 billion in net premiums written in 2020.
Chubb described the transaction as "highly complementary" and a part of its strategy to expand its presence in the Asia-Pacific region, which has been a long-term growth area for the company.
Upon completion, Asia-Pacific's share of Chubb's global portfolio will increase from approximately $4 billion to $7 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, with premiums growing from $3.7 billion to $6.1 billion. Together, A&H and life will comprise 21 percent of the company's overall premium revenue compared to 14 percent currently.
Chubb stated that the underlying economics and value creation of the transaction are "very attractive", and expects it to be immediately accretive to its core operating earnings.
The deal is expected to be completed in 2022, subject to required regulatory approvals and customary closing conditions.
"The addition of Cigna's business, which is overwhelmingly A&H, will further balance our global portfolio toward this important region," said Evan Greenberg (pictured), 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 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."
David Cordani, president and chief executive officer of Cigna Corporation, said: "Our agreement with Chubb is another step forward in advancing our strategic focus on our global health services portfolio. 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."
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