New York Life Insurance and Cigna in December 2019 reached a deal for New York Life to acquire Cigna’s group life and disability insurance business for US$6.3 billion.
The acquisition is expected to close in the third quarter of 2020, subject to applicable regulatory approvals and other customary closing conditions.
The group life and disability insurance business will operate within New York Life’s portfolio of strategic businesses and support its core retail life insurance franchise.
These businesses reinforce New York Life’s overall financial strength by generating capital that can contribute to its surplus, dividends, and earnings, which directly benefits the company’s policy owners. In addition, the Cigna Group Insurance employees, as well as the employees who primarily support the acquired business, will transfer to New York Life.
In a multi-year collaboration, Cigna and New York Life will continue to bring an integrated Health / Group offering to clients and prospects who desire it.
New York Life will pay Cigna $6.3 billion in cash. Cigna expects to realize approximately $5.3 billion of net after-tax proceeds from this transaction, to be used for share repurchase and repayment of debt in 2020. Cigna’s Board of Directors has increased the company’s share repurchase authority by $3.0 billion to an aggregate amount of $4.0 billion. The company expects the transaction to be neutral to earnings per share in 2020 and modestly accretive in 2021. Cigna continues to expect to meet its deleveraging commitments made following the Express Scripts combination.
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