In the largest-ever deal between two companies in the insurance industry, Ace announced Wednesday it had agreed to buy Chubb Corp. for $28.3 billion in cash and stock.

Chubb is well known for insuring businesses and wealthy individuals in the United States, a market segment that Swiss-based ACE also targets in its personal lines business. Both firms also have large middle-market commercial lines businesses.

“We are combining two great underwriting companies that are highly complementary,” Ace chairman and chief executive Evan Greenberg said in a news release. “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.”

The deal is one of the largest of the year and the biggest ever in the insurance space, with the exception of the U.S. government’s bailout of AIG in 2008, The Wall Street Journal reported.

“This is a landmark deal that puts two awfully good companies together and forms a global powerhouse with deep and defensible U.S. market penetration,” Imperial Capital credit analyst David Havens said.

Chubb is one of the biggest personal lines and business insurers in the United States. Its Masterpiece homeowners coverage is the choice of many wealthy Americans and, last year, it earned a profit of $2.5 billion on $12.6 billion in sales.

But according to the WSJ, the property-and-casualty sector has been facing pricing pressures and low interest rates have been hurting insurers’ investment income. In addition, with no major hurricanes making landfall in the United Statesin the past couple years,  “Insurers’ capital bases are growing in the absence of sending claims checks to individuals and consumers, and their stepped-up competition with each other to put the capital to work is depressing prices.”

Under the terms of the merger, Chubb shareholders will receive $62.93 per share in cash and 0.6019 shares of ACE stock. Upon closing, expected during the first quarter of 2016, ACE shareholders will own 70% of the combined company, and Chubb shareholders will own 30%.

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