Hartford to Acquire Aetna Group Life, Disability Business
October 23 2017 - 7:43AM
Dow Jones News
By Leslie Scism
Hartford Financial Services Inc. has agreed to pay $1.45 billion
to health insurer Aetna Inc. for a unit that provides life-,
disability-income and other insurance products to employers'
benefits programs in the U.S.
The acquisition will nearly double the Connecticut company's
business of selling benefits to employers, one of its main
operations outside of property-casualty insurance.
Hartford Chairman and Chief Executive Christopher Swift said in
an interview that the acquisition "will make us one of the top-two
players" in sales of the group-benefits products. Hartford's annual
premium in the business will expand to about $5 billion from $3.15
billion in 2016, and there will be more than 20 million people
insured by the combined operation.
Property-casualty insurance will remain Hartford's dominant
business with more than $10.5 billion in annual premium. Hartford
also has a mutual-funds operation.
Hartford's rivals in group insurance include Lincoln National
Corp., MetLife Inc., Prudential Financial Inc. and Unum Group.
The deal marks another sign of Hartford's turnaround from
struggles during the 2008-09 global markets meltdown. It was among
the hardest-hit insurers, when a long market-leading position in
sales of a stock-market-linked retirement-income product proved
riskier than anticipated. It took $3.4 billion in U.S. government
aid, since repaid.
In a news release, Aetna President Karen S. Lynch said the
divestiture allows "a stronger focus on our strategy of creating a
personalized approach to improving member health." Aetna said
options for deploying sales proceeds include internal investments,
share repurchases and debt repayment.
Hartford doesn't intend to issue debt or equity to fund the
purchase. It said it would use some money allocated for share
buybacks and said the transaction would add to its 2018
earnings.
Write to Leslie Scism at leslie.scism@wsj.com
(END) Dow Jones Newswires
October 23, 2017 07:28 ET (11:28 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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