A.M. Best Comments on Credit Ratings of The Hartford Financial Services Group, Inc. Following Announced
Transaction with Aetna Inc.
A.M. Best has commented that the Credit Ratings (ratings) of The Hartford Financial Services Group, Inc. (The
Hartford) [NYSE:HIG] and its subsidiaries remain unchanged following The Hartford’s recent announcement that it has entered into a
definitive agreement to acquire Aetna Inc.’s [NYSE:AET] U.S. group life and disability business.
Under the terms of the transaction, The Hartford will pay Aetna cash consideration of $1.45 billion, primarily comprised of a
ceding commission, to be paid by Hartford Life and Accident Insurance Company (HLA), the primary group benefits insurance
operating subsidiary of The Hartford. HLA will reinsure on an indemnity basis Aetna’s book of group life and disability insurance,
which had premiums of approximately $2 billion in 2016. The acquisition is expected to be accretive to The Hartford’s earnings in
2018 and will be funded by dividends from its insurance subsidiaries and holding company resources, including the $273 million
remaining under the company’s 2017 equity repurchase plan. A.M. Best expects financial leverage and coverage measures at the
holding company to remain within levels that support the current ratings.
While HLA’s capitalization is expected to decline moderately at year-end 2017 as a result of the transaction, A.M. Best views
the transaction as favorable to The Hartford’s market position, distribution and ability to compete in the U.S. group benefits
market. The transaction is expected to materially increase HLA’s distribution as well as provide an exclusive multi-year
opportunity for sales of The Hartford’s group benefit’s offerings through Aetna’s medical sales team. A.M. Best notes that while a
portion of consideration for the transaction will be funded by dividends from life and property/casualty entities, risk-adjusted
capitalization of those entities is expected to remain at adequate levels.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information
relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual
ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit Ratings . For information on the proper media use of Best’s Credit Ratings and
A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases .
A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
A.M. Best
Jonathan Harris, CFA, FRM, 908-439-2200, ext. 5771
Senior Financial Analyst – P/C
jonathan.harris@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Kate Steffanelli, 908-439-2200, ext. 5063
Senior Financial Analyst – L/H
kate.steffanelli@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com
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