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Cigna has divested its Asia-based life, accident and supplemental benefits business, selling it to Chubb in a transaction estimated at about $5.4 billion.
Cigna chairman and CEO David M. Cordani said the transaction allows the insurer to focus on growing its global health portfolio.
The organization’s life, accident and supplemental benefits businesses in Hong Kong, Indonesia, Korea, New Zealand, Taiwan and Thailand have now transferred to Chubb. Cigna and Chubb previously agreed to exclude Cigna’s interest in a joint venture in Turkey from the transaction.
The insurer expects to realize about $5.1 billion of net after-tax proceeds from the transaction. The proceeds are expected to be used primarily for share repurchase, with $3.5 billion used to fund an accelerated share repurchase announced on June 16.
When combined with Cigna’s previously completed share repurchases, Cigna remains on track to repurchase at least $7 billion of its shares in 2022, the company said.
WHAT’S THE IMPACT
The deal was originally floated in 2021, with Cordani saying at the time that Cigna is “proud of our success in building these life, accident and supplemental benefits businesses in Asia Pacific and improving the well-being and sense of security of our customers throughout the region.”
The insurer will continue operating its global health businesses as well as local market services in the Middle East, Europe, Hong Kong and Singapore, and its joint ventures in Australia, China and India.
In line with Cigna’s plan to concentrate on its healthcare businesses, earlier in 2021 it sold its group life, accident and disability insurance business to New York Life for $6.3 billion.
It also recently launched Evernorth, a rebrand of its health services portfolio, to consolidate a range of its healthcare businesses. In February, Evernorth added in-house telehealth capabilities through its acquisition of MDLive.
THE LARGER TREND
Outside of its recent business disposals, Cigna has been working on expanding its health coverage.
It moved into three new states – Georgia, Mississippi and Pennsylvania – as well as into new counties in Arizona, Florida and Virginia on the Affordable Care Act’s exchanges for the 2022 plan year. Cigna will reach into 93 new counties, all told.
Additionally, Cigna expanded its Medicare Advantage plans this year. It’s growing into 108 new counties and three new states – Connecticut, Oregon and Washington – which will increase its geographic presence by nearly 30%.