Cigna to sell its life, accident and supplemental benefits business in 7 countries to Chubb for $5.75B

close-up of money
Cigna is divesting its life, accident and supplemental benefits business in seven countries. (Pepi Stojanovski / Unsplash)

Cigna will divest its life, accident and supplemental benefits business in seven countries to insurance company Chubb in a deal valued at $5.75 billion, the insurer announced late Thursday.

Those business lines operate in Hong Kong, Indonesia, Korea, New Zealand, Taiwan and Thailand, as well as a joint venture in Turkey. The two companies expect the deal to close in 2022, pending regulatory approvals and closing conditions.

"Our agreement with Chubb is another step forward in advancing our strategic focus on our global health services portfolio," said David Cordani, president and CEO of Cigna, in a statement.  "We are proud of our success in building these life, accident and supplemental benefits businesses in Asia Pacific and improving the well-being and sense of security of our customers throughout the region."

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Chubb will pay the $5.75 billion as a cash consideration, and Cigna expects to net $5.4 billion after tax for the divestiture.

The insurer said it plans to put the proceeds largely toward share repurchases.

"The addition of Cigna's business, which is overwhelmingly A&H, will rebalance our global portfolio toward this important region," said Evan G. Greenberg, chairman and CEO of Chubb, in a statement. "We have long admired and respected Cigna's business in Asia including its talented people, innovative products, technical and analytical capabilities, distribution and management."

Cigna has made a number of moves of late to consolidate its healthcare-focused businesses and invest in those as its core. For example, it united a number of health services arms, including pharmacy benefit manager Express Scripts, under the Evernorth brand.

The insurer closed its acquisition of the country's largest PBM at the end of 2018, a deal valued at $67 billion.

In addition, Cigna also divested its group life, accident and disability insurance business earlier this year, selling it to New York Life in a $6.3 billion deal.