INDIA – Chubb Limited (CB), a property and casualty insurance company announced that it has completed its acquisition of Cigna Corp. in a US$5.36 billion deal.
The acquisition includes the life and non-life insurance companies that house the personal accident, supplemental health and life insurance business of Cigna in six Asia-Pacific markets.
The deal doesn’t involve Cigna’s health businesses in Australia, Hong Kong, Singapore, Europe, the Middle East and North America, the company said.
Cigna also will retain joint ventures in Australia, China and India and its domestic supplemental health business.
Cigna’s accident and health or A&H and life business in Korea, Taiwan, New Zealand, Thailand, Hong Kong and Indonesia were part of the deal. The acquired business has nearly 3,000 employees, who will now be part of Chubb.
These assets will boost Chubb’s premium revenues by US$3 billion, the property and casualty, accident and health, reinsurance, and life insurance company said in a news release.
According to the company, the reduction in the final purchase price from the original announcement reflects the impacts of rising interest rates and foreign exchange rates on acquired book value and other minor adjustments.
With the acquisition, Chubb aims to expand its presence in the Asia-Pacific region, a long-term growth area for the company.
With the addition of Cigna’s business, Asia-Pacific’s share of Chubb’s global portfolio will grow to approximately US$7 billion in premium from US$4 billion, and A&H writings will increase in size to around US$6 billion in premium, up from US$3.7 billion.
With the acquisition, Chubb aims to expand its presence in the Asia-Pacific region, a long-term growth area for the company.
Meanwhile, Cigna, in its statement, said the divestiture of its life, accident and supplemental benefits businesses in six Asia-Pacific markets was to sharpen focus on its expanding health portfolio.
Cigna and Chubb previously agreed to exclude Cigna’s interest in a joint venture in Turkey from the transaction.
“The completion of this transaction allows us to further focus our efforts to grow our global health portfolio,” Cigna CEO and Chair David Cordani said in the news release.
Meanwhile, Centene plans to unload its US$2 billion international health business this year, executives said in June.
In May, CVS Health subsidiary Aetna entered into an agreement to sell most of its African, Asia-Pacific, European and Middle Eastern insurance subsidiaries to Allianz Partners for an undisclosed sum.
The insurer previously dealt its Thailand operations to Allianz Ayudhya Capital Public Company. Aetna is also considering the future of its medical insurance business in India, US Business News reports.
In other developments, Indiana-based Old National Bank plans to sell its health savings account business to Kansas City, Missouri-based UMB Bank, the companies announced.
The deal, expected to close in the fourth quarter, includes about US$500 million in client assets held in about 157,000 accounts associated with more than 3,000 employer groups.
UMB declined to disclose financial terms of the transaction. Both banks are publicly held companies, but neither UMB nor Old National had disclosed financial terms in any of their public filings.
The deal is expected to close in the fourth quarter, pending regulatory approvals. Old National’s nine-person HSA team will join UMB Healthcare Services once the transaction closes.
Old National, which is headquartered in Evansville, got into the Health Savings Account (HSA) business in 2014 when it acquired Fort Wayne-based Tower Financial Corp.
In a public filing, Old National said the divestiture of its HSA business “will allow it to focus on its core banking operations while ensuring that current HSA clients continue to receive exceptional service by a nationally recognized HSA provider.”
UMB, a commercial bank, services more than 1.2 million HSAs totaling more than US$2.7 billion in assets.
Furthermore, the UK’s National Health Service (NHS) has committed to implementing electronic health records for all hospitals and community practices by 2025, backed by £2 billion (US$2.4 billion) in funding.
The investment from one of the world’s largest healthcare providers follows Oracle founder Larry Ellison’s promise to create “unified national health records” in the US after the company paid US$28.3 billion for Cerner, an American health software company also at the heart of many NHS record systems.
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