While it won’t be until 2023 that we’ll see Cigna New Zealand’s new form under the Chubb umbrella, Cigna’s business in Asia (including NZ) is already making an “immediate contribution” to the insurance group – all while the Kiwi unit looks forward to what’s coming.
In a message to advisers this week, Cigna NZ’s general manager for distribution David Haak (pictured) shared: “Recently we were fortunate to have two of Chubb’s most senior managers come to New Zealand to visit us – Bryce Johns, president [of] Chubb Life, and Brad Bennett, chief operating officer, Chubb Life.
“It was refreshing to get a global industry picture and hear about Chubb’s growth goals, digital innovation, and simplification projects that will positively impact us in the next few months. In the new year we’ll be letting you know more about our rebrand and how we’ll help you with the change.”
Haak did not elaborate on the visit but noted that his camp is “looking forward to the Chubb change” following the completion of the US$5.4 billion swoop, which also spans operations in Korea, Taiwan, Thailand, Hong Kong, and Indonesia. In July, it was announced that Cigna New Zealand chief Gail Costa will continue to have executive operating responsibility for the life insurer.
Read more: Chubb releases Q3 financials
Meanwhile Chubb, whose net income in the third quarter amounted to US$812 million, is already reaping the benefits from its multi-market acquisition – the final price tag for which was lower than what was originally announced, reflecting the impacts of rising interest rates and foreign exchange rates on acquired book value.
During Chubb’s earnings call for the third quarter, chair and CEO Evan G. Greenberg declared: “As you saw from the numbers, we had an excellent quarter in spite of [catastrophe] losses with terrific underwriting results, including outstanding combined ratios, record net investment income, double-digit constant dollar P&C (property and casualty) premium growth, well-balanced between commercial and consumer.
“And, finally, surging life division revenue growth with the addition of Cigna’s Asia business. Commercial P&C pricing was strong and exceeded loss costs in aggregate and in most individual lines of business.”
Greenberg went on to highlight: “Premiums in sub-life were up 117% in constant dollars and impacted heavily by the Cigna acquisition. Cigna’s operation contributed about US$740 million in net premiums written and US$160 million in income to the life segment this quarter. We have hit the ground running in terms of integration and execution of our growth strategies in Asia.”
Read more: Cigna NZ posts strong sales growth for 2021
To illustrate further, Chubb chief financial officer Peter Enns broke down the figures.
“The addition of Cigna’s A&H (accident and health) and life businesses in Asia are making an immediate contribution in line with what we expected,” stated Enns. “For the quarter, the acquisition contributed 7% accretion to operating EPS (earnings per share), 50 basis points to our annualised core operating ROE (return on equity) of 9.4%, and 110 basis points to our tangible ROE of 14.4%.
“Our integration efforts are progressing well, and we are on track with expected expense synergies and net integration costs, as we previously announced. Almost all of Cigna’s businesses are part of our life segment. And going forward, we will not report on a standalone basis.”
Locally, the Kiwi insurer that will soon be branded as “Chubb Life” continues to roll out various offerings for advisers and their clients.
In his update, Haak said: “From November 7, new customers who purchase life insurance with an adviser will receive two whole months of free cover, and existing customers who increase their life insurance will also qualify… We’re also still running our specific injury cover offer.”
The distribution general manager also provided assurances that systems and processes are all in order. “We have many people working behind the scenes to make sure our claims systems and processes run smoothly, and that your customers experience consistently excellent service,” he told advisers.
As indicated by Costa before, the change in Cigna NZ’s parent wouldn’t mean a change in how the company deals with partners and policyholders.
“Going forward, you (advisers) and your customers will continue to be looked after by the same great team who are committed to offering the quality service and support you have come to expect,” she asserted previously.
“The change will have no impact on your customers’ policy, coverage, or premiums. Should you or your customers need to do anything differently, we will be in touch to advise you of this.”
In New Zealand, Cigna insures more than 450,000 people, having operated in the Kiwi market for over a century.
