Newly formed insurance company issues health insurance linked notes
HARTFORD, Conn. – Aetna (NYSE: AET) today announced that, as part of its long-term capital management strategy, it has entered into a three-year reinsurance agreement with Vitality Re Limited. The agreement allows Aetna to reduce its required capital and provides $150 million of collateralized excess of loss reinsurance coverage on a portion of Aetna’s group commercial health insurance business.
“I am pleased to announce the successful completion of this transaction, which allows Aetna to free up capital held with respect to the covered business, and deploy it accretively for other purposes,” said Joseph M. Zubretsky, senior executive vice president and CFO. “Through this innovative transaction, we have improved our capital efficiency, enhanced our financial flexibility and reduced our weighted average cost of capital. We expect this to be the first step in a larger program.”
Aetna is one of the nation’s leading diversified health care benefits companies, serving approximately 35.4 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labor groups and expatriates. For more information, see www.aetna.com. To learn more about Aetna’s innovative online tools, visit www.aetnatools.com.
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