S&P lowers ACE, Chubb views to negative

Standard & Poor’s said it affirmed the financial strength ratings on the operating subsidiaries of ACE Ltd. and Chubb Corp.

The agency also said it revised the outlooks on the related operating subsidiaries to negative from stable.

S&P also said it placed the issuer credit ratings on ACE’s and Chubb’s holding companies on CreditWatch with negative implications.

The negative outlook revision follows news that ACE intends to acquire Chubb for $28.3 billion through a combination of equity, cash on hand and debt, the agency said.

The acquisition is expected to close in the first quarter of 2016, S&P added.

The agency said it believes the combined entities will ultimately create a stronger franchise and new-found status among the global multiline insurers, particularly in their key markets.

But, like many complex acquisitions, the combined company may face some challenges integrating two complex entities, preserving culture and shifting its strategy to support a new risk profile, S&P said.

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