Chubb is offering to acquire Hartford Financial in a deal valued at more than $23 billion.
If Chubb absorbs Hartford, it will mark the final stage for a company known to many over the decades as The Hartford, a favorite across the life insurance and property/casualty markets. Hartford had sustained life-threatening injury during the 2008 financial meltdown, when it was one of the largest Too Big To Fail companies to accept federal loans to remain solvent.
The meltdown hit Hartford’s variable annuity guarantees hardest, leading the company to wind down much of its life insurance sector business. The company’s current P/C focus made it a target for the latest Chubb acquisition.
Chubb became what it claims is the “world's largest publicly traded property and casualty insurance company” with operations in 54 countries and territories after it merged with Ace in 2016.
Chubb confirmed that it offered to buy Hartford Financial in a statement released Thursday.
“On March 11, Chubb Limited presented The Hartford with a proposal for a combination of our two companies that we believe would be strategically and financially compelling for both sets of shareholders and other constituencies,” according to the release. “This proposal would value The Hartford at $65 per share and represents a premium of 26% based on its unaffected 20-day volume weighted average share price of $51.70 as of March 10, 2021. The consideration represents a mix of stock with the majority in cash.”
The company said it had not received a response to its proposal. In a statement from Hartford, the company said, “The Hartford’s Board of Directors is carefully considering the proposal with the assistance of its financial and legal advisors. The Board of Directors is committed to acting in the best interests of shareholders over the long term.”
The pandemic has taken a toll on P/C businesses over the past year. Chubb reported a $1.19 billion loss related to COVID-19 over 2020.
Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected].
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