Chubb to buy Cigna’s Asian and Turkey businesses for $6bn
US group says acquisition will expand region’s share of its global portfolio to 20%
Chubb has agreed to pay $5.75bn for the life insurance and accident and health insurance businesses of Cigna in the Asia-Pacific region and in Turkey in the US group’s latest move to expand in the region.
Chubb said the purchase would increase Asia’s share of its global portfolio from $4bn to $7bn in premiums, or about 20 per cent of the company’s total, excluding mainland China.
Chubb has expanded in recent years through a string of acquisitions that have made it into the largest US non-life insurer by market value.
In 2018 it paid $2.1bn for commercial insurance specialist Navigator. In April this year it offered to buy industry rival Hartford in a deal that valued it at $25bn, but was rebuffed.
It has also sought to expand its interests in China, increasing its stake in its joint insurance venture in the country and signalling that it wanted majority control in 2019.
Chubb said on Friday it planned to take over the “life and non-life insurance companies that house the personal accident, supplemental health and life insurance business” of Cigna in South Korea, Taiwan, Hong Kong, Thailand, New Zealand and Indonesia, as well as its controlling interest in a joint venture in Turkey.
Chubb said it expected the purchase to increase operating income per share by 6 per cent for the full year and to increase return on equity by 0.55 per cent by 2023.
“The addition of Cigna’s business, which is overwhelmingly A&H, will further balance our global portfolio toward this important region,” said Evan Greenberg, chair and chief executive.
Chubb said the deal would require local regulatory approval but would not be subject to a shareholder vote.
It expected the acquisition of Cigna’s South Korean company, which would continue to operate under its local brand name, to conclude next year with the rest of the companies to follow later in 2022.
Cigna said it expected to realise net proceeds of $5.4bn after tax from the sale, which it planned to use primarily for share repurchases. The sale would help Cigna to focus on its health insurance operations, chief executive David Cordani said.
“Cigna will continue to operate its robust international health businesses for the globally mobile population, as well as local market services in the Middle East, Europe, Hong Kong, Singapore and its joint ventures in Australia, China and India,” Cigna added in a statement.
The all-cash deal would not affect any share repurchase plans or its annual dividend, Chubb said.