New York Life Insurance Purchases Cigna’s Non Medical For $6.3 Billion

As of last week, Cigna corp has decided to sell its nonmedical insurance unit to New York Life Insurance for $6.3 billion. Talks about Cigna selling this unit were brewing around early December and according to new reports New York Life decided to pull the trigger. The sell was announced Wednesday, December 18th. The reason behind selling such a large section was for Cigna Corp to offload any extra work to enable their full concentration on the healthcare side, which is their core growth platforms.

Cigna Benefits From Selling Non-Medical side

The money received from the sale will be used to increase share repurchase authority. According to Cigna “by $3 billion to an aggregate amount of $4 billion.” The proceeds will also be used to help pay back some of the debt taken in buy the purchase of Express Scripts last year for $67 billion. This isn’t the first time we have seen a major carrier unload its life and disability. Aetna the well-known carrier did it two years ago selling it’s business to The Hartford Group. Cigna will continue to focus on its consumers and Medicaid/Medicare programs in order to continue its competition with other insurance companies like Aetna, Humana, & Anthem.

Upsides for New York Life

On New York Life’s side, the deal gives them an opportunity to add millions of new policyholders. Cigna’s “group life and disability insurance business will operate within New York Life’s portfolio of strategic businesses,” the company says. It also allows New York life to provide more value to policy owners as well as strengthen their business model. The purchase of Cigna’s nonmedical side will certainly throw New York Life into a top-five in market share for nonmedical employers. With already being valued around $25 billion the purchase will surely raise the worth. It also allows the company to build other businesses in correlation to its retail insurance operations.

We will continue to keep you updated on the results of the stock buyout between Cigna & New York Life.

Empower Brokerage wants to help you understand what coverage you need and how to save money from getting it. We want to help you stay on top of your health. CALL US at (844) 410-1320

Get affordable health insurance quotes by clicking here.

See our other websites:

Leave a comment

Your email address will not be published. Required fields are marked *