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(954) 989-9000
Serving Florida and Nationwide
Call For A Free Consultation (954) 989-9000

Holding Insurance Companies Accountable For The Coverage They Promised and The Benefits You Deserve. Serving Florida and Nationwide.

Hartford Will Purchase Aetna’s U.S. Group Life And Disability Business For $1.45 Billion Cash

On Behalf of Disability Insurance Law Group | | Disability Insurance – General Topics

Hartford Financial Services Group just announced that it will purchase Aetna Inc.’s U.S. group life and disability business for $1.45 billion cash. Reuters reports that Hartford will use $273 million it has outstanding from its 2017 equity buyback program for the transaction, as well as dividends. It will not issue debt or equity for the purchase. “Hartford is financing the deal by dividends and clearly mentioned that it will not authorize an equity repurchase plan for 2018, driving the shares down,” Atlantic Equities analyst John Heagerty said. The transaction will make Hartford the second-largest provider of group life and disability insurance in America with more than 20 million customers. It will also give Hartford access to Aetna’s digital assets to improve its workers’ compensation and disability claims processes. The assets include an integrated absence management platform.

Reuters reports that insurance companies are increasingly focused on improving their technology, regarded as more antiquated than other parts of financial services, to help customer service and take advantage of data to influence policy writing. “We knew we would have needed to update our systems (for group benefits) in the next couple of years, so this gives us a significant advantage,” Hartford President Doug Elliot told Reuters. Aetna’s group life and disability insurance unit had premiums of about $2 billion in 2016, which would bring up Hartford’s total as of the end of last year to $5.1 billion, according to an investor presentation. Hartford also reported that its third-quarter core earnings fell 46 percent year on year to $222 million, weighed by higher losses caused by recent hurricanes and wildfires. The acquisition, which is expected to close this month, would add to Hartford’s earnings in 2018.

Large acquisitions and business transactions like the one between Hartford and Aetna may not directly impact your disability or life insurance policy, coverage or pending claim, however the indirect impacts can be significant. Contact one of our experienced insurance attorneys today for a free consultation on how we can assist you with your Hartford or Aetna disability or life insurance policy or claim.

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