Hartford To Buy CNA Life Group
By Mark E. Ruquet
NU Online News Service, Dec. 4, 12:50 p.m. EST?The Hartford Financial Services has agreed to acquire CNA Financial Corporation's group life and accident, short-term and long-term disability. The deal also includes the purchase of certain specialty businesses, such as accident, death and dismemberment insurance. The agreement excludes group long term care.[@@]
The Hartford, based in Hartford, Conn., said the purchase price is estimated to be approximately $500 million in cash, but a final figure will be set at the close of the sale. The carrier said it expects the sale to be completed sometime in 2004.
"We are very pleased to add these solid operations to our already successful group benefits operations," said Ramani Ayer, Hartford's chairman and chief executive officer, in a statement.
CNA said it expects about 1,200 employees to be transferred to The Hartford at the close of the transaction.
"The sale of group benefits enables us to sharpen our operational focus and move forward on our recently announced capital plan," said Stephen W. Lilienthal, CNA's chairman and CEO, also in a statement.
Property-casualty agents with CNA appointments will benefit by having access to a wider range of benefit products for their clients through the Hartford, said Wendy Manners, assistant vice president of development for SRS, the Hartford's third-party administrator and practice leader for Integrated Benefits.
By combining the two services, she said, agents will have seamless access to a full range of benefit products ranging from workers' compensation to absence management programs that are designed to help manage cases such as family medical leave.
In an investor's conference call, executives from The Hartford said they were increasing the carrier's earning guidance by 5 cents for both 2003 and 2004. For 2003, the company anticipates earnings per share between $5.25 to $5.35, and $5.60 to $6 per share for 2004.
Liz Zlatkus, executive vice president and chief financial officer of Hartford Life, who was placed in charge of the integration, said the acquisition would increase the company's market share in group disability to 15 percent from 10 percent, and group life to 6 percent from 4 percent. She added that the company expects the integration from the acquisition to be completed by the end of 2005.
The carrier would work to close the deal by the end of this year, she said, but there was no guarantee it would be completed that quickly.
Both Standard & Poor's and Fitch Ratings issued statements affirming their ratings on The Hartford.
S&P's rating for Hartford Life companies stands at "double-A-negative, stable." S&P said it had no rating on CNA Group Life.
Fitch changed its "A" rating on CNA Group Life from "rating watch negative" to "rating watch positive."
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