Cigna completes $ 6.3 billion sale of non-medical insurance unit to New York Life

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Cigna finalized the sale of its group life and the disability insurance unit at New York Life Insurance for $ 6.3 billion to focus on its health care business, the companies said Thursday.

The acquisition of Cigna’s group life, accident and disability insurance business, first announced a year ago, adds approximately 3,000 employees and over nine million customers to New’s “strategic business portfolio”. York Life, the companies said.

Cigna said she expects to realize $ 5.3 billion in “after-tax net proceeds” and “expects to use the proceeds primarily for stock repurchases and debt repayment,” said the society. in a depot Thursday with the United States Securities and Exchange Commission. Cigna said he would also use the proceeds to pay off debt accumulated during its $ 67 billion acquisition of drug benefit manager Express Scripts more than a year ago.

Cigna’s move is similar to what Aetna did in 2017 when it agreed to sell its life and disability business to the Hartford Group for $ 1.45 billion in cash.

“This acquisition, the largest in our company’s history, strengthens our financial strength by generating capital that can contribute to our surplus, dividends and profits,” New York Life President and CEO said Thursday, Ted Mathas, in a statement. “We are delighted to welcome to New York Life our new employees and the millions of new client relationships we will acquire through this landmark transaction. We look forward to strengthening our leadership position in the group insurance solutions market in the years to come.

Meanwhile, Cigna is focusing on its health offerings to consumers, employers and those insured by Medicaid and Medicare. Cigna is in a race with rival health insurance companies like UnitedHealth Group, Anthem, Humana and CVS Health Aetna to grow its business by administering health benefits for the elderly as more people flock to the plans. Medicare Advantage.

For her upcoming battles, Cigna will need the money from the New York Life divestiture as she competes with her rivals in the provision of health care services.

MORE FORBESTreat the whole person | Forbes Healthcare Summit 2020

Cigna chief executive David Cordani told attendees at the Forbes Healthcare Summit 2020 earlier this month that Cigna is focused on “the overall health of the person” and that it strives to integrate the company’s medical insurance, pharmaceutical benefits and mental health coverage into a more transparent operation for consumers. and sick.

“You have to be both mentally and physically fit,” Cordani said at the virtual event.


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