Acquisitions

3 Months Ended

Mar. 31, 2023

Cigna’s Accident and Health (A&H) and Life Insurance Business in Asian Markets

On July 1, 2022, we completed the acquisition of the life and non-life insurance companies that house the personal accident, supplemental health, and life insurance business of Cigna in several Asian markets. Chubb paid approximately $5.4 billion in cash for the operations, which include Cigna's accident and health (A&H) and life business in Korea, Taiwan, New Zealand, Thailand, Hong Kong, and Indonesia, collectively referred to as Cigna's business in Asia. This complementary strategic acquisition expands our presence and advances our long-term growth opportunity in Asia. Effective July 1, 2022, the results of operations of this acquired business are reported primarily in our Life Insurance segment and, to a lesser extent, our Overseas General Insurance segment. Refer to the 2022 Form 10-K for additional information on this acquisition.

The acquisition of Cigna's business in Asia generated $1,177 million of goodwill, attributable to expected growth and profitability, and $309 million of other intangible assets. None of the goodwill is expected to be deductible for income tax purposes. Additionally, the acquisition of Cigna's business in Asia generated $3,633 million of value of business acquired (VOBA). Chubb financed the transaction through a combination of available cash and $2.0 billion in repurchase agreements that expired at the end of 2022.

The following table summarizes Chubb's best estimate of fair value of the assets acquired and liabilities assumed at July 1, 2022. These estimates remain preliminary and are subject to adjustment. While they are not expected to be materially different than those shown, any material adjustments to the estimates will be reflected, retroactively, as of the date of the acquisition as a measurement period adjustment.


Preliminary estimate of assets acquired and liabilities assumed from Cigna's business in Asia	July 1
(in millions of U.S. dollars)	2022
Assets
Investments and Cash	$	5,274
Accrued investment income	33
Insurance and reinsurance balances receivable	52
Reinsurance recoverable on losses and loss expenses	3
Reinsurance recoverable on future policy benefits	85
Value of business acquired	3,633
Goodwill and intangible assets	1,486
Other assets	648
Total assets	$	11,214
Liabilities
Unpaid losses and loss expenses	$	12
Unearned premiums	60
Future policy benefits	3,856
Insurance and reinsurance balances payable	115
Accounts payable, accrued expenses, and other liabilities	926
Deferred tax liabilities	886
Total liabilities	$	5,855

Net acquired assets, including goodwill	5,359
Total	$	11,214

Direct costs related to the acquisition were expensed as incurred. Cigna integration expenses were $22 million for the three months ended March 31, 2023, and include one-time costs that are directly attributable to third-party consulting fees, employee-related retention costs, and other professional and legal fees related to the acquisition.

The following table presents supplemental unaudited pro forma consolidated information for the periods indicated as though the acquisition of Cigna's business in Asia that occurred on July 1, 2022, had instead occurred on January 1, 2021. The unaudited pro forma consolidated financial information is presented for informational purposes only and is not necessarily indicative of the operating results that would have occurred had the acquisition been consummated on January 1, 2021, nor is it necessarily indicative of future operating results. Significant assumptions used to determine pro forma operating results include amortization of VOBA and other intangible assets and recognition of interest expense associated with the repurchase agreement transactions used to effect the acquisition.


	Three Months Ended
Pro forma:	March 31
(in millions of U.S. dollars)	2022
Net premiums earned	$	9,512
Total revenues	$	10,417
Net income	$	2,059

Huatai Group

Chubb maintains a direct investment in Huatai Insurance Group Co., Ltd. (Huatai Group). Huatai Group is the parent company of, and owns 100 percent of, Huatai Property & Casualty Insurance Co., Ltd. (Huatai P&C), 80 percent of Huatai Life Insurance Co., Ltd. (Huatai Life), and 82 percent of Huatai Asset Management Co., Ltd. (collectively, Huatai). Chubb also holds a direct 20 percent interest in Huatai Life. Huatai Group's insurance operations have more than 700 branches and approximately 19 million customers in China.

On January 4, 2023, we completed transactions that increased our ownership interest in Huatai Group from 47.3 percent to approximately 64.2 percent. At March 31, 2023, we have agreements in place to acquire approximately 22 percent of incremental ownership interests, pending completion of certain closing conditions. Of those incremental ownership interests, approximately 3 percent also require regulatory approval. We have paid deposits of $567 million for the approximately 22 percent of ownership interests and, at March 31, 2023, the remaining aggregate purchase price to be paid upon closing is approximately $0.8 billion, based on current exchange rates. Chubb applies the equity method of accounting to its investment in Huatai Group by recording its share of net income or loss in Other (income) expense in the Consolidated statements of operations. Refer to Note 2 to the Consolidated Financial Statements in our 2022 Form 10-K for additional information.