The power to fuse data and analytics from The Hartford, one of the country's leading writers of workers' compensation policies, and Aetna, one of the country's leading health and disability insurance providers, largely drove a $1.45 billion deal between the two companies that was announced today.
The deal is expected to be completed within a matter of weeks.
"To combine The Hartford end of our group business with Aetna's life and disability will make us the second largest player in the business," Mike Concannon, Group Benefits head for The Hartford, said during an interview from The Hardford's Connecticut headquarters. "It excites us to bring that together, and we look forward to what we can do."
Part of what The Hartford will do is accelerate its technology strategy with help from Aetna's core operating systems and technology personnel. "At the end of the day, we really think we're going to be able to differentiate in terms of the outcomes that we deliver for customers," Concannon said.
He added that in the short term, customers of both companies as well as benefits brokers should see very little change in product offerings.
"I think the potential here, when we think about enhancing some of our products and services, is we're able to use our data and analytics to be better for customers," Concannon said. "I think there's longer-term potential for us to perhaps to think differently about some of our products."
Part of that long-term potential involves ramping up penetration among mid-size companies. "We both view that as a growth opportunity," he said.
A prepared statement from The Hartford said the acquisition will make it the county's second largest group life and disability insurer, with approximately $5 billion in expected earned premium.
"The combination of these two businesses strengthens our position as a leader in the large employer market and increases our presence among midsize employer clients," The Hartford's Chairman and CEO Christopher Swift said in a press release. "It also creates new opportunities to distribute additional products to a customer base of more than 20 million people who will be insured by the combined business."
Aetna President Karen S. Lynch added that the acquisition should result in improvements for customers on both sides of the merger. "Our transaction with The Hartford will benefit both our shareholders and customers, allowing us to have a stronger focus on our strategy of creating a personalized approach to improving member health," she said in a press release.
Ultimately, Aetna's digital assets were a big draw for The Hartford.
"Our claims organization continues to use data and advanced analytics across workers' compensation and disability to drive better outcomes for customers in both business lines, The Hartford's President Doug Elliot said in a press release. "As the nation's second largest workers' compensation insurer, and now, the second largest group disability insurer, this transaction increases our competitive differentiation and potential for future product offerings for absence management."
Read additional coverage of this news in our sister publication, ThinkAdvisor.
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Elana Ashanti Jefferson
Elana Ashanti Jefferson serves as ALM's PropertyCasualty360 Group Chief Editor. She is a veteran journalist and communications professional. Reach her by sending an e-mail to [email protected].
