No Responses Yet On How ACE - Chubb Merger May Affect Claims Department In California By Lonce LaMon - July 21, 2015
On July 1st 2015, exactly three short weeks ago today, ACE Ltd. agreed to buy Chubb Corp for $28.3 billion in cash and stock.This combining is going to create one of the biggest property-casualty companies in the world.
Both insurers write workers’ compensation insurance and have claims departments in California. ACE owns ESIS, with offices in Fremont, Chatsworth, and San Diego. Chubb has claims offices in downtown Los Angeles and Pleasanton. This includes Chubb Services, as well.
Seven inquiries went out by email from adjustercom asking for information or even speculation on how claims departments will be affected or even simply might be affected with this new ACE-Chubb merger. No one has responded, as yet. And no message bounced.
Will new claims departments open? Will two combine? More inquiries are being sent.
According to the Wall Street Journal, this merger deal comes as property-casualty insurers are facing the pressure of modest hurricane claims since 2012. Sounds like an oxymoron. How can pressure come from fewer claims? Well with fewer claims checks being cut, capital bases are growing and the stepped-up competition to put that capital to work is depressing prices.
New competitors in the industry are also squeezing prices, and low interest rates are pinching insurers’ investment incomes—which account for a significant amount of their profit.
The new company of ACE-Chubb will operate now under the Chubb name globally. No more ACE even though ACE bought Chubb. The new company will be based in Switzerland where ACE is currently based. Chubb has been based in New Jersey.
Evan Greenberg, chief executive of ACE, will lead the combined company. John Finnegan, the current CEO of Chubb, will serve as executive vice chairman for external affairs of North America and will assist with the integration. According to the Wall Street Journal, Finnegan told investors in a conference call that “there are some more reasons today that you might want to do a merger of this type than maybe five years so, but we weren’t out shopping it. This was a proposal that came to us and we thought it was a very good one.”
Greenberg is the one who approached Finnegan. Greenberg approached a financial advisor he knew was well regarded by Finnegan, and that brought about a meeting in New York. Greenberg is the son of Maurice R. “Hank” Greenberg, who transformed AIG from a low-profile, middling company into a global financial-services powerhouse over almost four decades before he left the New York company in 2005.
Evan Greenberg was quoted in the Wall Street Journal on July 1st: “I’ve been in the business for 40 years. Chubb is not a stranger to me. I’ve competed against them. I’ve admired them.”
Journalist Lonce LaMon; all rights reserved adjustercom and Lonce LaMon
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