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Ace CEO: Chubb merger is ‘historic opportunity’

Ace CEO Evan Greenberg: Addressed Chubb's employees

Ace chairman and CEO Evan Greenberg has met staff at merger partner Chubb — and told them they have an “historic” opportunity.

Mr Greenberg, whose firm has agreed to acquire US-based Chubb in a $28.3 billion cash-and-stock deal, said: “The opportunity in front of us is simply historic. There is no other way to say it. It is game-changing for our industry.

“We’re talking about taking two of the great companies, the great underwriting companies and, by the way, there is no greater accolade that anyone will ever get from me about a company than to say it’s a great underwriting company.”

But he added: “I know there’s all kinds of emotions flying.

“I know there’s resentment, I know there’s anger. I know there’s uneasiness. In some there’s even fear, but at some point you guys have to make a decision about your company and you’ve got to make it soon.”

And he said: “Don’t wallow. Be a part of this journey. Take what we are creating and help build it. Improve upon it and preserve it. Be a part of the history and the future of this.”

Mr Greenberg, the son of AIG chairman and CEO Hank Greenberg, who made the firm the biggest insurer in the world in his day, was speaking last week as he addressed the staff of Chubb in America.

Chubb chairman and CEO John Finnegan said Chubb had not thought about selling before being approached by Mr Greenberg.

But he added the Ace proposal included a substantial premium for Chubb shareholders and a link-up that offered “strong business and strategic logic”.

And Mr Finnegan said: “It would also keep the Chubb name and envisioned significant growth opportunities.

“In our discussions, it also became clear that Chubb’s and Ace’s strengths in many areas complement each other, providing opportunities to grow in ways that would not be available to either as stand-alone companies.”

Mr Finnegan said the integration process had already begun, with top-level committees from both companies working on “the best organisational structures and employee talent”.

He added: “When we complete the integration, I think we have the makings of a great enterprise.

“However, we recognise that a transaction of this type creates a substantial amount of employee concern, so we have tried to communicate to you on the rationale for the transaction and respond to frequently asked questions.”

Mr Greenberg told Chubb and Ace staff were both feeling the same uncertainty over the merger — and he pledged to communicate decisions to staff as fast as possible.

He added that the two companies were complementary and pointed out that Ace was focused on larger account and the top end of the market in the US, while Chubb’s expertise lay in the middle market.

And he told Chubb staff: “I assure you I and my colleagues intend to preserve and build upon and covet those parts of your culture and your business that makes Chubb what it is, the essence of the company.”

And he said that Ace had gone from 25th in the ranks of global property and casualty ranks 12 years ago to seventh today.

Mr Greenberg added: “Ace, first and foremost, we are builders.

“Two-thirds of our growth has come organically. Only one-third is through acquisitions and we made about 15 acquisitions over the last 12 years.”

And he said Ace had a strong presence in Latin America, Europe and Asia, with 25 offices in Malaysia alone and the only foreign company with 15 offices in Thailand.

Mr Greenberg added: “We’ve grown at twice the rate of the industry and our average combined ratio is seven points better than North America or international peers.

“Only one company was either equal or even better in one or two years than us and that’s this company, Chubb.”