Chubb merger increased links with Starr, filings show
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The former Ace Ltd.’s purchase of Chubb Corp. last year significantly increased the merged entity’s relationship with Starr Indemnity & Liability Co., according to financial filings.
In its 10-K filing with the U.S. Securities and Exchange Commission on Tuesday, Chubb Ltd., which was formed via the January 2016 deal, said the increase in business between the two insurers — which are both run by members of the Greenberg family — has been reviewed and approved by Chubb’s board.
The former Ace, which was headed by Evan Greenberg, who now heads the combined company, had some agency and reinsurance agreements with Starr, which is headed by his father, Maurice R. Greenberg, prior to the deal. With the purchase of Chubb, “we obtained Chubb Corp.’s pre-existing business with Starr, which included agency agreements and agreements in which Chubb Corp. was a reinsurer to Starr,” the filing states.
According to the Chubb filing, the agreements generated $658 million in gross premiums in 2016, more than double the $305 million they generated in 2015. Chubb reinsures part of the premium with Starr.
Ace first entered into agency agreements with Starr in 2006 and previously stated that Evan Greenberg was not involved in negotiating the terms of the agreements.
Overall, Chubb reported $28.15 billion in net premiums written in 2016, compared with $17.71 billion in 2015. The purchase of Chubb Corp. added about $10.8 billion in premium, which was partially offset by the adverse effect of foreign exchange.
The filing also shows the breakdown of Chubb’s core North American insurance business. According to the 10-K, Chubb’s major accounts operation represents 41% of its North America commercial property/casualty business; its commercial insurance operations, which cover midmarket and small businesses, represents 40%; and wholesale and specialty property/casualty represents 19%.
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