Bruce Japsen | Forbes | October 7, 2021
Cigna Thursday night said it will sell its life, accident and supplemental benefits businesses to Chubb for $5.75 billion in cash.
The businesses, which are located across seven countries, will allow Cigna to focus on its healthcare businesses, Cigna’s top executive said. Cigna in recent years has been adding more health and prescription benefits and medical care provider operations to compliment its commercial health insurance business, growing government-subsidized offerings such as Medicare Advantage plans and individual health insurance such as Obamacare.
“Our agreement with Chubb is another step forward in advancing our strategic focus on our global health services portfolio,” Cigna president and chief executive David Cordani said. “We are proud of our success in building these life, accident and supplemental benefits businesses in Asia Pacific and improving the well-being and sense of security of our customers throughout the region.”
Cigna, which bought the pharmacy benefit manager Express Scripts three years ago, has a big business administering coverage for large self-insured employers and is also packaging an array of medical, pharmacy and behavioral health benefits for employers large and small. In addition, Cigna’s Evernorth healthcare services business is growing and the company is looking to expand that as a way to compete with rival health insurers like UnitedHealth Group, which owns the Optum health services business, and CVS Health, which owns the national drugstore chain more than 1,000 MinuteClinics and the third largest health insurer in Aetna.
Cigna’s deal with Chubb is expected to be completed in 2022, “subject to applicable regulatory approvals and customary closing conditions,” Cigna and Chubb said Thursday night in a statement.
Once the transaction is completed, the companies said Chubb will acquire Cigna’s “life, accident and supplemental benefits businesses in Hong Kong, Indonesia, Korea, New Zealand, Taiwan and Thailand as well as Cigna’s interest in a joint venture in Turkey.” And in Korea, Chubb will “acquire and plans to continue to operate the business under the LINA Korea (Life Insurance Company of North America Korea) brand,” Cigna said.
“The addition of Cigna’s business, which is overwhelmingly A&H, will rebalance our global portfolio toward this important region,” Chubb chairman and CEO Evan Greenberg said. “We have long admired and respected Cigna’s business in Asia including its talented people, innovative products, technical and analytical capabilities, distribution and management.”
Cigna said it will continue to operate international health businesses for “the globally mobile population, as well as local market services in the Middle East, Europe, Hong Kong, Singapore and its joint ventures in Australia, China and India.”