Specialist global insurance intermediary Bellwood Prestbury has selected Guildford based Voyager Insurance Services as their preferred provider to launch a new on-line travel insurance plan created for both UK and EEA residents.

With a choice of three core plans: single, multi-trip and long stay cover for up to 24 months - business trips are included as standard and all plans are available to individuals and groups with the option to include most pre-existing medical conditions.

The new plan offers automatic cover for a huge range of leisure activities at no additional charge including bungee jumping, snow skiing, hot air ballooning, water tubing, zip wiring, scuba diving and even dog sledging.

Andrew Apps, Head of Global Healthcare at Bellwood Prestbury commented, "By bringing together a choice of comprehensive cover benefits and affordable premiums, this unique programme recognises the demands and requirements of those looking for high quality but affordable travel insurance and with a dedicated web site at www.bellwoodprestbury.com/travel the process of choosing the right policy has been designed to be as easy and straight forward as possible, enabling cover be put in place within a matter of minutes."

Bellwood Prestbury is a leading global insurance specialist, arranging high-risk and complex cover for individuals, companies and organisations throughout the world. From oil and gas contractors in Iraq to humanitarian workers providing vital support in Africa, Bellwood Prestbury offers independent, affordable and tailored solutions to businesses located in most parts of the world by sourcing the right balance between premiums and benefit protection.

Bellwood Prestbury is authorised and regulated by the Financial Conduct Authority (FCA) the regulatory body overseeing UK financial services firms. It is also a member of British Expertise, the leading UK organisation for British companies offering professional services internationally, and members of other specialist industry bodies. Bellwood Prestbury is accredited by the British Assessment Bureau to ISO 9001.

Insurance industry leaders are poised to instigate a far-reaching initiative to overhaul risk accumulation and exposure reporting in the fast-expanding casualty sector. 

Kareo today announced the results of a survey, in partnership with the American Academy of Private Physicians (AAPP), measuring the perceptions and benefits of various practice models. Kareo joined efforts with AAPP on this survey in part to raise awareness of its agile medical practice model. The model exists to empower independent practices’ success by helping them incorporate various payment modalities to solve contentious issues associated with a traditional practice model.

The survey measured common practice challenges, motivations for considering direct pay or concierge practice models, as well as the most important technological needs in direct pay, concierge and insurance-based practice settings.

The survey revealed that 46% of primary care physicians would consider transitioning to direct pay, concierge or other membership models in the next three years, citing the desire to spend more time with patients and to separate from the insurance payer system as their primary motivators. In fact, 81% of private (direct pay or concierge) practices reported that, on average, they spend 30-60 minutes with patients, whereas the majority of traditional insurance-based practices stated that they were only able to spend 15-20 minutes with a patient on average.

Respondents also detailed the primary challenges of each of their respective practice models. For conventional, insurance-based practices, the most commonly faced challenge is staying financially viable. For concierge and direct-pay practices, recruiting new patients was the top concern.

“As this survey showcases, there are challenges and benefits for both private and conventional practice models,” said Rob Pickell, Chief Strategy Officer of Kareo. “However, despite varying workflows and processes, providers are assessing the environment and making changes to better serve patients and ensure the success of their practices. As independent providers look to become more agile, it is Kareo’s mission to support the enhanced payment and practice marketing demands of all care models.”

“The insights gleaned from this survey show the shifting mind set in small practices working to remain independent ahead of changing patient expectations,” said Tom Blue, Chief Strategy Officer of AAPP. “These results reaffirm the need to make medical care more accessible and convenient to patients, reinforcing AAPP’s mission and supporting Kareo’s innovative philosophy around the benefits of becoming an agile medical practice.”

Single and family premiums for employer-sponsored health insurance rose an average of 4 percent this year, continuing a decade-long period of moderate growth, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2015 Employer Health Benefits Survey. Since 2005, premiums have grown an average of 5 percent each year, compared to 11 percent annually between 1999 and 2005.

The average annual premium for single coverage is $6,251, of which workers on average pay $1,071.  The average family premium is $17,545, with workers on average contributing $4,955.

The survey also finds that 81 percent of covered workers are in plans with a general annual deductible, which average $1,318 for single coverage this year. Covered workers in smaller firms (three to 199 workers) face an average deductible of $1,836 this year. That’s 66 percent more than the $1,105 average deductible facing covered workers at large firms (at least 200 workers).

Since 2010, both the share of workers with deductibles and the size of those deductibles have increased sharply. These two trends together result in a 67 percent increase in deductibles since 2010, much faster than the rise in single premiums (24%) and about seven times the rise in workers’ wages (10%) and general inflation (9%).

“With deductibles rising so much faster than premiums and wages, it’s no surprise that consumers have not felt the slowdown in health spending,” Foundation President and CEO Drew Altman said.

“Employees are benefiting from stable employer health benefits coverage and modest premium growth,” said Maulik Joshi, president of HRET, an affiliate of the American Hospital Association. “Also noteworthy is that many employers are tying financial incentives to employee participation in health and wellness programs.”

This year, 57 percent of employers offer health benefits to at least some of their workers, statistically unchanged from 55 percent last year. Offer rates vary by firm size, with 98 percent of large firms (200 or more workers) offering coverage, compared to less than half (47%) of the smallest firms (three to nine workers).

Beginning in 2015, employers with at least 100 full-time equivalent employees (FTEs) must offer to their full-time workers health benefits that meet minimum standards for value and affordability or pay a penalty. The requirement applies to employers with 50 or more FTEs beginning in 2016.

Of firms reporting at least 100 FTEs (or, if they did not know FTEs, of firms with at least 100 employees), 5 percent say that they offered more comprehensive benefits this year to some workers who previously were only offered a limited benefit plan, and 21 percent say that they extended eligibility to groups of workers not previously eligible.

Among employers with 50 or more FTEs (or, if they did not know how many FTEs, firms with at least 50 employees), 4 percent report that they changed some job classifications from full-time to part-time (less than 30 hours per week) so employees would not be eligible for health benefits, while 10 percent report changing some job classifications from part-time to full-time to enable workers to obtain coverage. Four percent also report reducing the number of full-time employees they planned to hire because of the cost of health benefits.

The survey provides an early look at employers’ response to the Affordable Care Act’s excise tax on high-cost health plans, sometimes called the “Cadillac tax,” which begins in 2018.

A majority (53%) of large employers (200 or more workers) offering health benefits say that they conducted an analysis to determine if any of their plans would exceed the Cadillac tax thresholds, and about one in five (19%) of this group say their plan with the largest enrollment will exceed the threshold amount. In addition, 13 percent of large firms offering health benefits say they have made changes to their plans to avoid reaching the excise tax thresholds, and 8 percent say they switched to a lower-cost health plan.

“Our survey finds most large employers are already planning for the Cadillac tax, with some already taking steps to minimize its impact in 2018,” said study lead author Gary Claxton, a Foundation vice president and director of the Health Care Marketplace Project.  “Those changes likely will shift costs to workers, but exactly how and how much will vary for individual workers.”

The survey also captures some steps employers have taken to limit their provider networks as a way to reduce costs: 9 percent of firms offering health benefits say that one of their plans eliminated a hospital or a health system from their network, and 7 percent offer a “narrow network” plan, generally considered more limited than the standard HMO network.

Many large employers offering health benefits offer health screening programs including health risk assessments (50%), which are questionnaires asking employees about lifestyle, stress or physical health; and biometric screenings (50%), which are in-person health examinations conducted by a medical professional.

The survey finds that 31 percent of large employers offering health benefits have a financial incentive for employees to complete health-risk assessments, and 28 percent have an incentive for employees to complete biometric screening.

The majority of large employers continue to offer wellness programs, such as smoking cessation, weight loss or other lifestyle coaching.  Thirty-eight percent of those offering one of these wellness programs provide a financial incentive for employees to participate or complete the program.  Among these firms, 15 percent offer a maximum incentive greater than $1,000 for all of a firm’s health and wellness programs, including any incentives for health screening.

International Medical Group®, Inc. (IMG®), a leader in the global insurance and assistance services market, has signed a definitive agreement to be acquired by ABRY Partners (ABRY), a leading private equity firm headquartered in Boston, Massachusetts.

"ABRY is a natural fit for ownership as IMG continues to grow," said IMG President and CEO Brian Barwick. "With decades of experience investing in high-quality companies, ABRY will complement IMG's growth by providing capital to further expand our global presence."

IMG's operations will not be impacted by the ownership change, Barwick said, adding, "It will be business as usual for our employees, producers and clients."

Founded in 1989 as a managing general underwriter, IMG has become one of the leading international insurance providers in the world, serving members in more than 200 countries.

"Over the years, IMG has developed a reputation for excellence in the global insurance and assistance services markets," said ABRY Partner Brent Stone. "We are excited to welcome such a well-established company to our portfolio and look forward to working with the IMG team."

IMG's executive management team, Board of Directors and current private equity partners — Altaris Capital Partners and Galen Partners — approved the agreement.

Executive Vice President and Chief Operating Officer Todd Hancock said, "ABRY shares our vision, energy and commitment to being there to protect and enhance the health and well-being of our constituents. We look forward to working with ABRY, and we are grateful to Altaris and Galen Partners for their support since August 2012."

Greenhill, a leading independent investment bank, facilitated the transaction. Terms of the transaction were not disclosed.

In a recent International Private Medical Insurance Magazine executive round table business forum, we spoke with leading C-Level executives about the major differences between international private medical insurance plans and local insurance plans.

As expatriate hot spots around the world continue to mandate insurance cover for expatriate employees, under various visa and employment laws, questions from the business community continue to be raised. Issues focus around how new laws will help and assist expatriates and what levels of cover they may expect from local insurance plans.

GREGOR SCHULTE Globality Health: At their heart, international health insurance plans are designed to cover all costs of high quality medical care regardless of the location of the insured person and the standard of local health services. Whereas a local plan is designed to provide cover primarily in a single country, taking into account the insurance practice and requirements of that country, access to state healthcare provisions and treatment costs in local hospitals only.

Of course international plans offer cover that transcends borders and generally include benefits specifically applicable to expatriates, such as repatriation and evacuation cover, assistance services and benefits, portability and freedom to choose the healthcare provider. The result is that iPMI usually provides far higher levels of benefits than those available from ‘local’ schemes, although this is dependent on which country is considered.

ANDREW APPS ALC Health*: Superficially there are many similarities between a local and international private medical (iPMI) plan. The fundamental difference is the target audience for each of these two very different products.

An iPMI plan is designed to cover a policyholder, usually an expatriate, for practically any health-related matter they may encounter, a local scheme does not have the same mandate, being designed with the local population in mind and most often acting as a support to local, often staterun facilities. This means that the features of each of these plans are markedly different.

The most noticeable difference is that an international plan usually offers a wider, more comprehensive range of benefits and with much higher benefit limits. For example, with an iPMI plan there can be generous cover for items such as GP visits, full chronic conditions cover, routine pregnancy and childbirth cover, evacuation and repatriation cover, and usually overall sum insured amounts that can be ten or twenty times higher than those of a local scheme.

Typically, an iPMI plan will also be portable, and not restricted to their country of residence, allowing the geographically mobile policyholder full access to all of their benefits wherever they are, in their chosen area of cover. Some iPMI plans also do not require their insured members to seek treatment within a network. The policyholder has the freedom to choose where they wish to receive treatment.

Naturally local schemes are usually less expensive than international plans, but correspondingly, the benefits are far less comprehensive, with low benefit limits (sometimes the benefits are blatantly only a contribution towards the total cost of treatment), out-of-network penalties, co-pay benefits, none or very limited out-of-country coverage. Most local schemes also do not offer 24 hour support.

Similarly by their very nature, local schemes are very much tailored to the local population with policy documentation available only in the local language and the benefits tailored to the audience the plan is designed for. The unwary expatriate with local cover may well find that he either has to make do with low levels of cover, or more likely will have to self-pay at least part of his treatment.

PHIL AUSTIN Cigna: International Health Insurance plans by their nature are better suited to expatriate life than local plans. They usually provide cover worldwide, meaning that wherever the individual happens to be in the world, they will be able to receive treatment.

Local plans on the other hand will normally only provide cover in a single country. This means that when the expatriate is making a trip back home, or is spending time in another country, they are potentially ineligible for treatment.

Moving to a new country often brings about basic challenges like language barriers and cultural adjustments. An international health insurance plan helps the expatriate remove a lot of this uncertainty as they will be dealing with a provider with experience in working with expats and experience in global healthcare. This means that often a language barrier can be removed by speaking to the insurer who can communicate directly with the hospital, and the expat can seek advice about local customs and peculiarities.

Finally and perhaps most importantly, expatriates who are not permanent residents or citizens of the country they are moving to may be ineligible for a local plan.

SHIRLEY PUCCINO GeoBlue: Local plans are designed to deliver coverage and services inside the host county and tend to incorporate underlying government health programs, networks, and delivery systems reflecting local languages, customs, business practices and provider relationships. International health insurance plans strive to provide more comprehensive global cover and an optimal experience globally, while to the extent possible, allow for local nuances in plan administration, delivery and practices.

READ THE COMPLETE ROUND TABLE, CLICK HERE.

*At the time of round table publication Andrew was working at ALC Health.

HX Global, the US arm of Healix International, has appointed John Hankamer as Senior VP of Sales to head up its new sales office in Houston, with a focus on supporting companies operating in the global oil & gas market.

Hankamer has over 25 years’ experience providing product and service solutions to organizations in a variety of industries including Oil & Gas, Engineering, Construction and Mining. Having previously worked at International SOS, FrontierMEDEX and most recently Remote Medical International, the bulk of his career has been in the medical and security assistance and medical staffing business, supporting clients headquartered in the south central and western US.

Gregory Cain, President of HX Global commented, “Having known John since 1998 when we previously worked together at AEA International, I have long sought his joining us and am delighted that he will be spearheading our growth in the oil & gas market. His wealth of experience will be invaluable in assisting our clients, many of whom operate in some of the most challenging and remote environments.”

In addition to Texas, John’s remit will also cover organizations headquartered in the neighboring states of New Mexico, Oklahoma, Arkansas, Louisiana and Alabama.

HX Global® is the US subsidiary of Healix International Ltd, a global leader in international medical, security & travel assistance and international occupational health services. Working on behalf of multinational corporations, governments, NGOs and insurers, Healix is entrusted to look after the welfare of millions of expatriates, travelers and local nationals in every country of the world, 24 hours a day.

John can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it. or on +1 281 547 8891.

Or for more information, contact This email address is being protected from spambots. You need JavaScript enabled to view it..   www.hx-global.com

 The Vitality Group, part of the world's longest-standing and largest incentive-based workplace health promotion and prevention program, has expanded its executive team following the successful launch of its partnership with John Hancock Insurance and exceeding the three-fourth million member milestone in the United States (US).

"These additions and new appointments of our executive staff strengthen our ability and capacity for growth," said Alan Pollard, CEO, The Vitality Group (TVG). "We are well-positioned to continue developing the most actuarially-sound and effective wellness program to help our clients have healthy and productive employees."

Executive Promotions

• Derek Yach, Chief Health Officer
  Previously Executive Director of the Vitality Institute and Senior Vice President of TVG, Derek will serve as the Chief Health Officer for Vitality. He will continue to oversee a team invested in building out the science and evidence underpinning health promotion and workplace well-being and applying it in practical ways to improve overall health. Derek will represent Vitality externally from a health perspective and lead interactions with business, global media and NGOs globally.
• Steve van der Watt, CEO of new Vitality entity
  Previously Chief Sales Officer, Steve will be the CEO of a new entity within TVG that will be announced later this year which represents an exciting and substantial growth opportunity for the organization. Steve has led the remarkable revenue growth for Vitality's corporate channels over the past few years.
• Stephen Mitchley, Chief Strategy Officer
  Promoted from Chief Operating Officer to Chief Strategy Officer, Stephen is spearheading the development of common Vitality capabilities across the various partner markets in which Discovery operates.
• Sean Katz, Chief Information Officer
  Previously Senior Vice President, Systems and Technology, Sean is responsible for systems and technology delivery for TVG.
• Brad Beckman, Chief Operating Officer
  Promoted from Senior Vice President, Servicing and Human Resources, Brad will lead the execution of strategy and operations for TVG.

New Staff Appointments & Promotions

• Karen Kaplan, Vice President of Product Development
  Karen has been a core member of the Vitality team in the US for 12 years. She has driven successful launches of many strategic partnerships and projects. As Vice President of Product Development, her focus will be on further developing Vitality's product roadmap to support both our partnerships and corporate clients.
• Keith Karem, Vice President of Marketing
  Having previously led business and partnership marketing for Hyatt Hotels Corporation, Keith brings a wealth of experience in business-to-consumer and business-to-business marketing, new product development and brand management. Keith is charged with developing a new brand strategy for the company.
• Kenneth Sloan, Vice President of Sales
  With more than 20 years' experience in sales and management leadership in health plan consulting and wellness, Ken held sales positions most recently with 5Star Life Insurance Company (an Armed Forces Benefit Association enterprise) and United Healthcare. Ken will play a key role in furthering Vitality's relationships with brokers and consultants.
• Mark Smith, Chief Sales Officer
  Mark joins Vitality from HealthMarkets (a Blackstone Portfolio Company) where he was Executive Vice President and Chief Agency Officer, leading one of the largest distribution businesses in the individual health insurance space. Prior to that he held various senior regional and national positions at United Healthcare and was previously part of the Discovery family, having worked for Destiny Health. Mark is charged with leading the recently enlarged sales team.

Evolving Role of the Vitality Institute
The Vitality Institute was launched two years ago by Discovery Ltd, the South African insurance company, as part of its commitment to health promotion and well-being programs that advance social good. The Institute's dual purpose was strengthening the science underpinning prevention and health promotion, and elevating the discourse to reflect a more evidence-based approach to chronic disease prevention. The Institute has become accepted by lead media, government, corporations and academics as a "go-to" place for leadership and insights on adult health promotion, prevention and workplace health.

"The Institute has made enormous progress during its tenure and after careful consideration, we've determined that the time is ripe for the Institute to evolve to a new phase for optimal global impact," said Adrian Gore, CEO of Discovery. "Current initiatives run by the Vitality Institute will be completed towards the end of 2015, at which point key projects will be internalized within Vitality to take implementation to the next level both in the US and across our other markets."

Derek Yach, Chief Health Officer, Vitality, noted "As a first flagship initiative the Institute convened a Commission on Health Promotion and the Prevention of Chronic Disease in Working-Age Americans which brought together leading experts from multiple sectors, ranging from public health to finance and technology. Specific recommendations, published in a report launched in June 2014, are being implemented which we believe will have a profound effect on the way prevention is viewed and managed both in the US and beyond."

Examples of actions coming from the Commission are:

• The call for prevention science has led to the deans of schools of public health and the National Institutes of Health starting new advocacy and analytic work to redress underspending in this field,
• the importance of getting evidence-based health metrics included in integrated reporting frameworks has led to an initiative that involves large corporations, workplace health experts, standard-setting bodies linked to the Dow Jones and other stock exchanges; and
• the need to address data/privacy concerns around the use of personalized health technology (including wearable devices) has led to draft responsibility guidelines for the design and implementation of such technologies.

About Vitality
The Vitality Group is a member of Discovery Ltd., a global financial services organization offering an incentive-based wellness program to employers as part of their benefits program. With a foundation based on actuarial science and behavioral economic theory, Vitality encourages changes in lifestyle that reduce health care costs, both in the short run and long term, by rewarding members for addressing their specific health issues. Vitality wellness programs serve companies in a wide range of sizes and industries, improving individuals' health and wellbeing as well as employers' bottom lines.

Vitality brings a global perspective through successful partnerships with large employers and best-in- class insurers around the world, in countries including the United States, United Kingdom, South Africa, China, Singapore and Australia. Additional information can be found at thevitalitygroup.com.

Swiss Re has partnered with Backbase to develop a new digital platform for selling and servicing life and health products online. The solution includes Swiss Re's know-how and Backbase's technical and customer experience expertise.  The new platform will broaden Swiss Re's client capabilities in the life and health insurance market, which already includes Swiss Re's market-leading automated underwriting system, Magnum; an insurance carrier iptiQ; and proposition development capabilities.

The digital platform will be available to Swiss Re's European insurance partners, and will enable online delivery of simple protections products, such as critical illness or term-life products.

"It has long been part of the reinsurer's role to support the industry in evolving and adapting to new consumer needs. Swiss Re is ready to take this forward by helping our clients set themselves up to serve a new generation of life insurance consumer. This helps to close society's protection gaps and meet the needs of the self-service generation," says Paul Hately, Head of Swiss Re Protection Partners, and Board Member at iptiQ. "We chose Backbase because of their ability to easily deliver great customer experiences in the digital world."

Backbase is specialist in developing digital channels for financial services companies. It was selected to begin developing the digital platform because of its strong focus on delivering a superior customer experience, and its proven track-record in the insurance industry.

"We are very excited that Swiss Re has selected Backbase as the platform to deliver its digital services to its many insurance partners," says Frank Uittenbogaard, Regional Director of Backbase. "Swiss Re has a strong vision and they realise digital in an omni-channel world is essential. Backbase CXP will bring Swiss Re all the capabilities to quickly on-board new partners, combined with the ability to completely tailor and customise the user experience."

ACE Limited and The Chubb Corporation have announced that the Boards of Directors of both companies have unanimously approved a definitive agreement under which ACE will acquire Chubb. Under the terms of the transaction, Chubb shareholders will receive $62.93 per share in cash and 0.6019 shares of ACE stock.

Based on the closing price of ACE stock on June 30, 2015, the total value is approximately $124.13 per Chubb share, or $28.3 billion in the aggregate. This is the equivalent of $125.87 per Chubb share using ACE’s 20-day volume weighted average share price for the period ending June 30, 2015. Upon closing of the transaction, ACE shareholders will own 70% of the combined company, and Chubb shareholders will own 30%. The consideration represents an approximately 30% premium to Chubb’s closing price of $95.14 on June 30, 2015.

Together, ACE and Chubb will create a global leader in commercial and personal property and casualty (P&C) insurance, with enhanced growth and earning power and an exceptional balance of products as a result of greater diversification and a product mix with reduced exposure to the P&C industry pricing cycle. The combined company will remain a growth company with complementary products, distribution, and customer segments, a shared commitment to underwriting discipline and outstanding claims service, and substantially increased data to drive new, profitable growth opportunities in both developed and developing markets around the world. The combination will create efficiencies that will provide flexibility for the company to invest in people, technology, products and distribution as well as improve the company’s competitive profile. Additionally, the balance sheet’s size and strength will elevate the combined company into the elite group of global P&C insurers. As of December 31, 2014, on an aggregate basis, the combined company had total shareholders’ equity of nearly $46 billion and cash, investments and other assets of $150 billion.

Growth and Earning Power of the Combination

“We are thrilled to announce the acquisition of Chubb, a venerable company with a great brand,” said Evan G. Greenberg, Chairman and CEO of ACE Limited. “This transaction advances our strategy in a meaningful way and represents an outstanding opportunity to create significant value over a reasonable period of time for both ACE and Chubb shareholders. We are combining two great underwriting companies that are highly complementary. We will make each other better and create a unique company in a class of its own that has greater growth and earning power than the sum of the two companies separately.”

John D. Finnegan, Chairman, President and CEO of Chubb, said, “This is a compelling transaction for all Chubb and ACE stakeholders. The combination brings together two highly respected and successful companies with complementary capabilities, assets and geographic footprints. We are confident that it will deliver strong value to Chubb shareholders, including an immediate premium and participation in the future growth and profitability of a well-positioned combined company. We are pleased that the combined company will adopt the Chubb brand and view this as an affirmation that both companies share a commitment to the attributes of quality and service the brand represents. We look forward to working together as we create a best-in-class global franchise in P&C insurance.”

Complementary Presence and Capabilities

In the United States commercial lines business, ACE provides a broad range of products and services for industrial commercial, multinational and upper middle market companies with distribution substantially through a major brokerage presence. Chubb is primarily a middle-market commercial, specialty and surety insurer with a broad product portfolio and a major agency presence. In personal insurance, Chubb is a leading provider of personal lines coverage to high net worth customers in the U.S. while ACE has been increasingly focused on these customers as well.

Outside the U.S., ACE is a premier commercial insurer with a presence in 54 countries and a broad product, customer and distribution capability. Chubb’s operations in 25 countries will complement and deepen ACE’s presence. ACE has a leading market position in global accident and health (A&H) and both companies offer complementary personal lines offerings in Canada, Europe, Asia and Latin America. The combined company will have a leading position in professional lines globally with broad product offerings for all sizes of commercial customers.

“We will be well balanced with greater presence and capabilities in product areas that have less exposure to the commercial P&C cycle,” continued Mr. Greenberg. “We have complementary product strengths – where one of us is not present, the other is. Where one of us is strong, the other is even stronger. Where there is overlap in product, generally one of us is more present at the large end of the corporate market while the other is serving the smaller or mid-market segment. The data and insight we will gain from our respective skills and experience will allow us to do so much more. For example, Chubb will enhance ACE’s ability to serve the upper middle market, while ACE will provide more products to serve Chubb’s middle market clients, and our combined strengths will enable us to pursue the small and micro markets globally.

“Finally, we will benefit from each other’s complementary cultures, including a shared passion for underwriting discipline and outstanding claims service. Operating under the Chubb name, with sustained long-term underwriting profit and a larger invested asset base that will benefit from rising interest rates, we will take advantage of the growth opportunities and significant efficiencies to be gained between us. Together, we will grow more substantially and at a faster rate, producing greater earnings, than we could achieve as two separate companies. We look forward to welcoming the talented Chubb employees and their customers and distribution partners to the ACE family.”

Attractive Shareholder Returns

It is expected that the transaction will be immediately accretive to earnings per share and book value, and by year three, the transaction will be accretive to EPS on a double-digit basis and will be accretive to ROE. It is anticipated that the ROI will exceed ACE’s cost of capital within two years, result in a double-digit return by year three, and tangible book value per share will return to its current level in three years.

Management, Board of Directors, Name and Headquarters

Upon completion of the transaction, the combined company will be led by Mr. Greenberg as Chairman and Chief Executive Officer. Mr. Finnegan has agreed to serve as Executive Vice Chairman for External Affairs of North America and will assist with integration. The company’s Board will be expanded from 14 directors to 18 directors with the addition of four independent directors from Chubb’s current Board.

Chubb will continue to operate under its name while the combined company transitions to operate under the Chubb name globally. The combined company will remain a Swiss company with principal offices in Zurich. Chubb’s headquarters in Warren, New Jersey, will house a substantial portion of the headquarters function for the combined company’s North American Division. ACE will continue to maintain a significant presence in Philadelphia, where its current North American Division headquarters is based.

Financing, Efficiencies, Closing and Approvals

ACE intends to finance the cash portion of the transaction through a combination of $9 billion of ACE and Chubb excess cash plus $5.3 billion of senior notes with a range of maturities to be determined. ACE intends to target a debt-to-total capital ratio of approximately 20% following the acquisition, within the guidelines for the company’s ratings.

By the third year after closing, the company expects to realize annual expense savings of approximately $650 million pre-tax where both companies overlap. The company also expects to achieve meaningful growth that will result in substantial additional revenue. By year five, earnings accretion is expected to be balanced between revenue and expense-related synergies. The efficiencies created will provide greater flexibility for the company to invest in people, technology, product and distribution.

The transaction is expected to close during the first quarter of 2016, subject to approval by ACE and Chubb shareholders, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and regulatory approvals.

Advisors

Morgan Stanley & Co. LLC is serving as financial advisor and Sullivan & Cromwell LLP is serving as legal counsel to ACE. Guggenheim Securities, LLC is serving as financial advisor and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Chubb.