(New all through, provides background and updates share value to shut)

March 18 (Reuters) – Property and casualty (P&C) insurer Hartford Financial Services Group Inc stated on Thursday it has acquired a takeover bid from bigger rival Chubb Ltd , which might create an insurance coverage behemoth value round $100 billion.

“The Hartford’s board of directors is carefully considering the proposal with the assistance of its financial and legal advisors” and can act “in the best interests of shareholders over the long term,” the insurer stated in a press release after Bloomberg News reported on the talks.

The Hartford didn’t disclose monetary particulars of Chubb’s supply. The Hartford shares rose 19% to shut at $68.15 on the information, pushing its market worth previous $24 billion.

Chubb didn’t instantly reply to a request for remark.

A deal between The Hartford and Chubb can be the most important within the sector since Aon Plc’s $30 billion acquisition of Willis Towers Watson final 12 months, and the biggest within the U.S. P&C insurance coverage area since Chubb was created in its present type in January 2016.

Then, ACE Ltd purchased Chubb Corp for $28.5 billion, with the mixed firm retaining Chubb’s branding.

In a be aware, Wells Fargo analysts known as The Hartford’s small-business insurance coverage franchise the primary draw for Chubb, which at present focuses on protecting mid-sized and huge corporations. Chubb has round $9.4 billion of extra capital to fund any transaction.

They famous that earlier offers within the P&C area valued corporations at upwards of 1.8-times ebook worth, probably seen as a baseline for negotiation by The Hartford, which traded at 1.14-times previous to Thursday’s information. A 1.75-times valuation would value The Hartford at $30 billion.

The cornoavirus pandemic is reshaping the insurance coverage trade, and consolidation may assist minimize prices after substantial losses in 2020.

Chubb Chief Executive Officer Evan Greenberg warned in April final 12 months that the pandemic would probably spur the single-largest loss within the trade’s historical past. The insurer booked $1.19 billion in pandemic-related losses in 2020.

P&C insurers additionally confronted vital disaster losses in 2020 from wildfires in western states and probably the most lively Atlantic hurricane season on file. Combined with claims related to civil unrest, these outweighed advantages from fewer auto claims as folks drove much less due to the pandemic, Fitch Ratings stated in a report on Thursday.

Chubb, which reported $41 billion of gross written premiums final 12 months, additionally supplies private accident and supplemental medical insurance, in addition to life insurance coverage, in 54 nations and territories.

Founded in 1810, The Hartford reported $17.3 billion in whole premiums final 12 months. The firm supplies protection for staff’ compensation, administration {and professional} legal responsibility, and different specialised areas, together with political threat.

The Hartford famously offered baseball slugger Babe Ruth an insurance coverage coverage in 1920 for incapacity safety and in addition insured the one dwelling Abraham Lincoln ever owned.

Chubb traces its roots to 1882 when Thomas Caldecot Chubb and his son Percy opened their marine underwriting enterprise in New York City. (Reporting by Noor Zainab Hussain and Sohini Podder in Bengaluru and David French in New York; Additional reporting by Niket Nishant in Bengaluru; Editing by Shounak Dasgupta, Shinjini Ganguli, Aditya Soni and David Gregorio)

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