Global re/insurer Chubb Ltd has confirmed that it submitted a preliminary proposal to acquire insurance and financial services company The Hartford for around $23 billion.

In a statement, the company said yesterday: “On March 11, Chubb Limited presented The Hartford with a proposal for a combination of our two companies that we believe would be strategically and financially compelling for both sets of shareholders and other constituencies.

“This proposal would value The Hartford at $65 per share and represents a premium of 26 per cent based on its unaffected 20-day volume weighted average share price of $51.70 as of March 10, 2021. The consideration represents a mix of stock with the majority in cash.

“We have not yet received a response to our proposal but are looking forward to constructive, private discussions in order to expeditiously consummate a fair transaction that benefits all of our respective stakeholders.

“No agreement has been reached, and there can be no assurance any transaction will result from these discussions, and even if a transaction is agreed upon, there can be no assurances as to its terms, structure or timing.”

Bloomberg reported that a takeover of The Hartford would rank as one of Chubb chief execuitive Evan Greenberg’s largest deals since the almost $30 billion tie-up of Ace Ltd, the firm he previously used to run, with the company then known as Chubb Corp. in 2016. With a Hartford acquisition, Chubb would further expand his insurance empire with deeper footholds in the small-business insurance market as well as auto and home insurance sectors.

Hartford, led by chief executive officer Chris Swift, has long been seen as a potential acquisition target. Swift, and his predecessor Liam McGee, have de-risked the insurer and focused it more on property-casualty coverage and some employee-benefits operations after the company took a bailout in the financial crisis, Bloomberg said.

In a separate statement, The Hartford Financial Services Group, Inc, which operates through its subsidiaries under the brand name, The Hartford, confirmed receipt of the unsolicited proposal.

The company said yesterday: “The Hartford today confirmed that it has received an unsolicited, non-binding proposal from Chubb Limited to acquire The Hartford.

“The Hartford’s Board of Directors is carefully considering the proposal with the assistance of its financial and legal advisors. The Board of Directors is committed to acting in the best interests of shareholders over the long term.”

Bruce Ballentine, Moody’s Investors Service vice-president - senior credit officer, said: “Chubb’s potential acquisition of the Hartford would boost Chubb’s market presence in US small commercial and personal lines while adding integration risk and potentially higher financial leverage.

“Hartford would benefit from becoming part of a large global P&C insurer, although such a merger could disrupt relationships with its customers, agents and employees.”

Chubb is the world's largest publicly traded property and casualty insurance company.

It has operations in 54 countries and territories, including Bermuda, where it has an office on Woodbourne Avenue in Hamilton.