Zurich-based global insurer Ace has agreed to buy US-based Chubb Corporation for $US28.3 billion ($37 billion) in what is believed to be the largest-ever deal between two insurance companies.

Ace shareholders will take 70% of the new company, which will operate under the Chubb name. 

Ace CEO Evan Greenberg will run the combined company, while Chubb CEO John Finnegan will serve as executive VP for external affairs in North America.

The companies expect to complete the deal during the first quarter of next year.

Ace said in a statement released overnight that the combined entity “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”.

Mr Greenberg says the merger “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.”

US media reports overnight quoted Mr Finnegan saying the deal came together in the past few weeks, although he had not been actively seeking a buyer for Chubb.

The Ace-Chubb merger is the latest in a string of mergers and acquisitions taking place in the global (re)insurance industry as mid-sized companies seek global scale.

More details in our regular bulletin on Monday.