October 23, 2017

The Stag buying Aetna's group life, disability unit

PHOTO | Contributed
PHOTO | Contributed
The Hartford's headquarters.

Hartford Financial Services Group Inc. says it will pay $1.45 billion cash to acquire Aetna's U.S. group life and disability business.

Announced Monday by the pair of Hartford-based insurers, the deal set to close early next month bolsters The Hartford's group-benefits distribution network while advancing its technology strategy. The transaction is subject to state regulatory approvals and other closing conditions.

Separately, The Hartford reported Monday third-quarter net income was nearly cut by half from a year earlier due to what appears to be the U.S. property-casualty industry's worst storm and catastrophe losses in a decade.

The Hartford is a consumer-commercial property-casualty insurer also active in the worker's compensation and group disability insurance market. Aetna's primary market is individual and group health coverage and benefits.

Also as part of the tentative deal, about 1,800 Aetna Group workers will migrate to The Hartford, the companies said. The Hartford also will acquire some of Aetna's digital assets, which The Hartford says it will use to enhance the experience the company delivers to its customers.''

"The transaction provides a unique and accretive opportunity for The Hartford to become the second largest group life and disability insurer, an important business for The Hartford with a stable risk profile, attractive returns and strong long-term growth prospects," The Hartford's Chairman and CEO Christopher Swift said in a statement.

Aetna said it has several options for the deal proceeds, including share repurchases and debt repayment.

"Our transaction with The Hartford will benefit both our shareholders and customers, allowing us to have a stronger focus on our strategy of creating a personalized approach to improving member health," said Aetna President Karen S. Lynch.

For three months ended Sept. 30, The Hartford said it netted $234 million, or 64 cents a diluted share, down from $438 million, or $1.12 a share, netted the same quarter a year ago.

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