It appears as though global insurer Chubb could be eyeing a takeover bid for rival carrier Hartford Financial Services, according to reports emerging from Bloomberg.
Chubb is led by Chief Executive Officer Evan Greenberg and is reported to be in the process of weighing up an acquisition for a rival currently estimated to have a market capitalization of around $22 billion.
People familiar with the matter have told Bloomberg that Chubb is currently exploring the deal, and could very well prove to be one of the biggest deals of 2021.
It’s claimed Chubb has made a preliminary takeover approach for Hartford, but that deliberations are at an early stage.
As such, Bloomberg sources, who wished to remain anonymous due to the circumstances’ sensitive and confidential nature, stress that these approaches are at an early stage and might not yield and actual transaction.
Bloomberg’s report adds that a representative for Hartford was unable to be reached for comment.
It’s worth noting that M&A rumours can quite easily be sparked from something as innocuous as the meeting of two CEOs.
However the fact Greenberg is widely understood to be exploring ways to grow the company and turn it into one of the world’s largest does add weight to the reports.
Indeed, The Hartford would be a good fit, considering the many areas in which the two companies compete, as well as the myriad ways potential synergies could be recognised, not least in the reinsurance space.
Chubb’s market capitalisation is said to be roughly $77 billion, making it a significantly larger player due to its greater global diversification.
Following the breaking of these reports, Hartford shares have jumped 10%, while Chubb’s rose by 1% and then fell by more than 2.5%.
Trading in sares in the Hartford were halted briefly due to the volatility in the sudden spike after the rumour of Chubb’s interest broke.
The size and scope of this potential deal, though still at a very early stage and involving a different segment of the industry, echos the mega-merger currently underway between Aon and Willis Towers Watson.
As such, it’ll be interesting to see how the industry (and regulators) might respond, if indeed these reports have merit to them.
Greenberg Transformation
Greenberg, 66, built the business into a mammoth insurer by combining Ace Ltd., the company he ran, with Chubb Corp. in a nearly $30 billion deal in 2016. The son of former American International Group Inc. CEO Maurice “Hank” Greenberg, he has transformed Chubb into a firm with huge footholds in both personal and commercial lines. The company calls itself the world’s largest publicly traded property and casualty insurer, with operations in 54 countries and more than 30,000 employees, according to its website.
Hartford, led by CEO Chris Swift, traces its roots back more than 200 years. It offers a range of property and casualty insurance including automobile policies, homeowners’ coverage and small business insurance. Hartford reported last month that fourth quarter core earnings rose 22% to $636 million, beating estimates.
The Connecticut-based company ranks as the second-biggest provider of workers’ compensation insurance in the U.S., according to A.M. Best Co. It also has mutual fund arm with about $139 billion under management, its website shows.
Source: Insurance Journal
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