Business as usual after Cigna sell-off

The surprise sale of Cigna Corporation's life insurance business to global giant Chubb should not make much difference to its New Zealand operation say those in the industry.

Thursday, October 21st 2021, 3:13PM

by Matthew Martin

Earlier this month, Cigna Corporation announced it had sold its life insurance businesses to another large US-based insurer, Chubb, for US$5.75 billion.

Cigna bought the OnePath life insurance business from ANZ in 2018 for $700 million which was regarded by some as a high price.

The sale included a 20-year strategic alliance for Cigna to provide insurance solutions for ANZ bank customers.

Insurance adviser and columnist Jon-Paul Hale says it will probably be business as usual for Cigna and its clients.

"But the business seems to be a hot potato, Cigna bought out OnePath and now Chubb has bought out Cigna - it's the usual story of a big conglomerate dragging a New Zealand company along into the deal."

He says Cigna has been focused on good client outcomes and hopes that will continue.

"It will be business as usual, Chubb may look at it as just a small Kiwi business and put it on the block, but we will see when the dust settles."

Life Direct general manager Jay Nielson says this sort of transaction happens regularly so it was not much of a surprise.

"We have a pretty close relationship with Cigna and we don't expect that to change too much.

"We haven't had any queries from our clients about it either."

Nielson says he has gone through the same situation in the past when Sovereign merged with AIA and it was basically business as usual.

"As long as we get the same results from the new owners I don't think there'll be a problem...it is early days and we'll wait and see what comes of it.

"With a bigger company taking Cigna on board they may be able to make additional investments," Nielson says.

Cigna New Zealand chief executive Gail Costa said in a statement that Chubb was looking forward to playing a leading role in the future of the global life insurance industry.

"They see New Zealand as a highly desirable market and are excited about our growth potential...as it now adds life insurance to their fire and general presence in New Zealand."

Cigna's head office says the agreement "...will sharpen Cigna’s focus on the growth path for its rapidly expanding global health portfolio".

“Our agreement with Chubb is another step forward in advancing our strategic focus on our global health services portfolio."

The transaction is expected to be completed in 2022, subject to applicable regulatory approvals and customary closing conditions.

Tags: Chubb Cigna insurance Jon-Paul Hale Life insurance LifeDirect