Insurance Giant Chubb Offers to Buy Rival Hartford

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Chubb Ltd.,

CB -2.63%

one of the nation’s biggest, oldest and best-known property-casualty insurers, has made a preliminary proposal to acquire

Hartford Financial Services Group Inc.,

HIG 18.71%

another storied name in the industry.

The Connecticut-based Hartford said in a release Thursday afternoon that it “has received an unsolicited, non-binding proposal from Chubb” to acquire the 211-year-old company. Hartford said its board of directors “is carefully considering the proposal with the assistance of its financial and legal advisors.”

Chubb didn’t immediately return requests for comment.

The offer signals that Chubb’s chief executive,

Evan Greenberg,

is ready for another bold deal.

In 2016, Mr. Greenberg was CEO of business and home insurer Ace Ltd. when he combined it with the then-New Jersey-based Chubb Corp., in an approximately $30 billion transaction. The merger turned Chubb into an international powerhouse.

Mr. Greenberg and his team have delivered strong financial results, and Chubb has become one of the biggest global insurers with market capitalization of more than $75 billion as of Thursday. Its shares were down 2.6% at the market’s close.

After news of Chubb’s takeover approach for Hartford was first reported Thursday by Bloomberg News, shares of Hartford surged. They jumped yet further after the insurer’s midafternoon news release, to finish the day up nearly 19%. Its market capitalization stands at about $24 billion.

Hartford was one of the hardest-hit U.S. insurers during the 2008-09 global markets meltdown. The firm took federal aid, which it has since fully repaid. In the years since, Hartford divested various units to focus mostly on property-casualty insurance for businesses and individuals, offerings for employers’ benefit program and a mutual-funds business.

Its chief executive, Christopher Swift, has made some acquisitions over the past few years as the firm narrowed its focus. Those deals included buying a specialty business insurer, Navigators Group, and a unit from Aetna Inc. that provides life insurance, disability income and other products for companies’ employee-benefit programs.

Before its merger with Ace, Chubb was known by the public as a leading provider of homeowners’ insurance to wealthy Americans through its pricey, but extensive Masterpiece coverage.

Evercore ISI analyst David Motemaden said Hartford was a logical choice for a company like Chubb, which is trying to reinforce operations to insure small-business clients. In a research note, he said Hartford’s small-commercial franchise could complement Chubb’s leading position in insuring large companies, while Hartford’s business of insuring midsize companies would bolster Chubb’s operations in that part of the market.

Hartford said in its release that its board of directors “is committed to acting in the best interests of shareholders over the long term.”

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