ACE buys upmarket Chubb in biggest ever insurance takeover
Thursday, 07 02 2015, Category: Insurance and Reinsurance, Country: United States
Swiss insurance giant ACE Ltd will buy upmarket property insurer Chubb Corp for $28.3 billion to get access to wealthy clients who pay higher premiums at a time when fierce competition has cut deeply into the industry's profit margins.
The takeover, the biggest ever in the insurance sector, will create the world's largest property and casualty insurer by underwriting income.
Rock-bottom catastrophe insurance premiums, the rise of catastrophe bonds, low interest rates and stiff competition have prompted a wave of acquisitions among underwriters.
Chubb shares rose to a record high of $129.31, above the offer price of about $124.13, suggesting some investors see potential for a rival bid. ACE shares rose 5.3 percent.