Aetna (AET) announced today it will acquire Genworth Financial Inc.’s (GNW) Medicare Supplement business – Continental Life Insurance Company of Brentwood, Tennessee and its subsidiary, American Continental Insurance Company.
$290 million = Transaction cost
$240 million = Total capital for redeployment to other Genworth Life Insurance Companies
$35 million = Genworth’s after-tax gain
Q4, 2011 = Expected close date (pending regulatory and closing agreement approvals)
$317 million = Continental Life’s net earned premium for 2010
~145,000 = Medicare Supplement members moving under the Aetna umbrella
Aetna is acquiring:
· 100% of stock in Continental Life Insurance Company of Brentwood, TN.
· Aetna is leaving Genworth Life and Annuity or Genworth Life Insurance Company intact. The aforementioned Genworth companies offer Medicare Supplement options in CA, NJ, OR, UT, and VT.
· Continental Life Medicare Supplement is offered in DE, GA, IA, ID, LA, MD, MN, RI, WI, and WV.
· Continental Life’s subsidiary included in the acquisition, American Continental, has Medicare Supplement offered in AL, AR, AZ, CO, IL, IN, KS, KY, MI, MO, MS, MT, NC, ND, NE, NM, OH, OK, PA, SC, SD, TN, TX, VA, and WY.
Aetna wins by improving its Medicare Supplement business. Genworth wins by bringing on some cash, which it plans to “redeploy” to other in-focus lines of business. Additional cash is never a bad thing for a company weathering a 52-week low.