In March 2021, Chubb offered to buy Hartford Financial Services for $23.2 billion with the intent to expand further into the auto, home and small business insurance sectors. The Hartford rejected the offer, stating that it was too low. The company is awaiting a higher bid.
The Hartford reported that its fourth-quarter earnings rose by 22%, and saw its shares double over the past year. The Hartford reported that it is aware that Chubb submitted the offer with The Hartford’s successful small commercial platform in mind, and its ability to provide scale and expertise in the middle market and global specialty areas. With this rejection, The Hartford’s market value surged to $24 billion.
Chubb’s attempt is expected to alert other large personal lines carriers to start making moves, and that it is possible that The Hartford could receive competing bids. Allianz, a Germany-based insurer, also announced interest in making a bid for The Hartford, as it has an existing relationship since the 2008 financial crisis and views the carrier as one of the remaining property and casualty insurance targets with scale in the U.S.
Despite having a relatively small footprint in the U.S., Allianz is Europe’s biggest insurer and has been actively pursuing expansion. The company just purchased Aviva’s life and non-life insurance operations for $2.9 billion, making Allianz the fifth-largest insurer in Poland. Allianz pursued an acquisition of P&C carrier XL Group but lost to AXA in 2018.
Allianz could decide against pursuing the deal as it doesn’t want to enter a bidding war with Chubb, but a bid could expand Allianz’s presence in the U.S. among smaller corporations and ease consolidation with existing companies.
If Chubb does return with a higher bid, the combination of Chubb and The Hartford would create a nearly $37 billion P&C premium powerhouse and jump ahead of carriers such as Liberty Mutual, Allstate, Travelers and USAA to become the fourth-largest carrier in the P&C industry.