Global insurer ACE Ltd. is purchasing New York Life's Hong Kong- and Korea-based life insurance subsidiaries for $425 million in cash, the companies said Wednesday.
It will be ACE's first foray into life insurance in both Hong Kong and Korea. The company already has property and casualty insurers there. The acquisitionfollows ACE's purchase earlier this month of Malaysian general insurance company Jerneh Insurance Berhad for about $200 million.
ACE is getting an operation that represents $330 million in extra life insurance revenue, $2.15 billion in assets and 2,400 dedicated insurance agents, the Zurich-based company said. It expects the deal will add to earnings within the first year.
"These two life insurance companies are small, solid agency operations that have been managed conservatively by New York Life, a venerable and highly professional company," said ACE Ltd. Chairman and CEO Evan G. Greenberg. "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."
New York Life chairman and CEO Dick Mucci said in a statement that the company has decided "to concentrate on our operations in the U.S. . . and on our markets in Asia and Latin America where we have strong market positions."
The deal, which ACE is funding with available cash, is expected to close in the first quarter of 2011. In morning trading, ACE shares slipped 86 cents to $60.40 as the broader market fell.