Bloomfield-based Cigna will buy Austin, Texas-based Great American Supplemental Benefits Group. The sale is expected to close in the third or fourth quarter of this year.
The soon-to-be acquired businesses accounted for $400 million in assets, $325 million in revenues and $34 million in pre-tax operating earnings for American Financial Group last year.
"Great American Supplemental Benefits is an ideal strategic fit with Cigna's growth plans to expand our presence in the U.S. individual and seniors segments through a broad range of supplemental health solutions," said Thomas Richards, president of Cigna Individual and Family Plans.
The acquisition allows Cigna to grow and expand in individual supplemental benefits offerings within the U.S.; to improve the company's capabilities in Medicare Supplement and other supplemental plans; to extend its retail efforts of selling directly to customers, and to broaden its distribution network of agents and brokers.
"We are excited to have Great American's talented team, led by their president, Brad Wolfram, join the Cigna organization," Richards said. "Their product portfolio and distribution channels combined with Cigna's next generation retail capabilities will further enhance our U.S. and international consumer services. We will work to create substantial value for our customers, shareholders, employees, and other key stakeholders as we extend our health solutions and services across the individual and senior segments."
S. Craig Lindner, co-CEO of American Financial Group Inc.,said, "Completion of this transaction allows AFG to devote capital to its core specialty property and casualty insurance and annuity businesses as well as to repurchase AFG common stock, as appropriate. At the same time, we are pleased that our Medicare Supplement and Critical Illness businesses will help to expand Cigna's presence in the U.S. Individual and Seniors segments through a broad range of consumer focused supplemental health solutions."