Ace Ltd. has agreed to purchase
Chubb Corp in a deal pegged at $28 billion that should protect the diversity of products brokers can offer clients.
Chubb will continue to operate under its own name, with the Ace acquisition set to create a global P&C leader of just colossal size.
The combined company will remain focused on organic growth, according to Ace, pointing to product offerings, distribution and customer segments. The combination will create efficiencies that will provide flexibility for the company to invest in people, technology, products and distribution as well as improve the company’s competitive profile.
“The balance sheet’s size and strength will elevate the combined company into the elite group of global P&C insurers,” according to a press release announcing the transaction. “As of December 31, 2014, on an aggregate basis, the combined company had total shareholders’ equity of nearly $46 billion and cash, investments and other assets of $150 billion.”
The deal comes as carriers grapple with increasingly mature markets across North America and the pressures of the current low-interest rate environment.
Those challenges haven’t slowed the entrance of new competitors, even in the luxury segment, further placing pressure on the bottom line of existing players.
Brokers are on the frontlines of that battlefield, although any direct impact on their own businesses stemming from the Ace-Chubb deal is expected to be muted. Still, some brokers have looked at industry consolidation as a potential challenge going forward if choice for clients is reduced in the face of more consumer-direct competition from P&C insurers.
