Hartford Financial Services Group Inc. has confirmed its commitment to the non-medical group benefits market by agreeing to acquire a large group life and disability business from Aetna Inc.
Hartford Financial has agreed to pay Aetna $1.45 billion in cash for the business, and to reinsure a block of in-force group life and disability policies. The in-force policies generated about $2 billion in premium revenue in 2016, the companies say.
Hartford Financial would get about $3.4 billion in investment assets and about $3.3 billion in reserves in connection with the reinsurance arrangement.
About 1,800 Aetna employees would become employees of Hartford Financial, and Aetna's medical insurance sales team would offer Hartford Financial group life and disability plans. A copy of the deal agreement filed with securities regulators appears to imply that the Hartford Financial group benefits team would offer its clients Aetna medical insurance products.
(Related: Annuity Issuers Size Up Benefits M&A Market)
Hartford Financial and Aetna are both based in Hartford.
The companies say they hope to get the regulatory approvals they need to complete the deal in early November.
Hartford Financial made a series of moves to reduce the scope of its operations in the wake of the Great Recession that started in 2007. Christopher Swift, Hartford Financial's chairman, said in a statement that the company is making the Aetna deal because the deal will help it become the second biggest group life and disability insurer, and bring the company a business with a stable risk profile, attractive returns and strong growth prospects.
