Pursuing its strategy to
rationalise its foreign operations, the US’ largest mutual insurer
New York Life (NYL) has reached a definitive agreement with
composite insurer ACE Group to sell its wholly-owned life insurance
operations in Hong Kong and Korea for about $425m in cash.
Commenting on the deal, Dick Mucci,
chairman and CEO of NYL’s non-US arm, New York Life International,
said: “While these are well-established businesses, New York Life
has made the decision, as part of a strategic shift, to concentrate
on our operations in the US, where we have the leading market share
in life insurance, and on our markets in Asia and Latin America
where we have strong market positions.”
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NYL’s other foreign units are in
China, India, Thailand, Taiwan, Argentina and Mexico.
Evan G Greenberg, chairman and CEO
of ACE Limited, ACE Group’s Swiss-domiciled holding company, said
that the two insurers being acquired from NYL are “small, solid
agency operations that have been managed conservatively” by
NYL.
“They provide a good foundation on
which to build our life operations in these two territories, as
part of our overall life insurance strategy in the region,” said
Greenberg.
The transaction with NYL will
expand ACE’s life insurance business into two Asian markets, where
it currently has general insurance operations and represents about
$330m in incremental life insurance revenues, $2.15bn in assets,
and over 2,400 tied agents.
Greenberg said the transaction is
financially attractive to ACE Group and that within the first full
year of ownership it will be accretive to earnings and book value
per share and achieve a return on capital that meets ACE’s
targets.
Commenting further, Greenberg said:
“ACE has a good track record for building and managing insurance
companies globally, and a young but successful record with building
de novo life companies in Asia, including China, Vietnam, Thailand
and Indonesia.”
Established 25 years ago, ACE Group
has life and general insurance and reinsurance operations in 53
countries and territories.
In 2009, ACE Group reported gross written premium income of
$19.2bn.
