Reinsurance implications of Chubb acquisition by ACE
Friday, 07 03 2015, Category: Insurance and Reinsurance, Country: World
In a move that will have significant ramifications for the global reinsurance market re/insurer ACE Group has announced that it is to acquire competitor Chubb Group to create the world’s largest property and casualty firm.
At $28.3 billion this is a huge deal, dwarfing the other insurance and reinsurance merger and acquisitions deals that we have seen so far. This one also could have the widest felt ramifications for the reinsurance and also insurance-linked securities (ILS) sectors.
The combined company will be a reinsurance buying powerhouse, with shareholders’ equity of nearly $46 billion and cash, investments and other assets of as much as $150 billion.
ACE and Chubb are two of the largest reinsurance cedants in the world, with large programs utilising both traditional and alternative sources of reinsurance capacity.
Bringing together the two firms ensures that the amount of risk ceded to the reinsurance and ILS market will shrink, as efficiencies and duplication are found and eliminated.