AM Best comments on Cigna Corporation’s credit ratings following the announcement of the sale of the company in Asia-Pacific
OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best indicated that the long-term issuer credit rating (long-term ICR) of “bbb” (good) and the long and short-term issuance ratings of Cigna Corporation (Cigna) (head office in Bloomfield, CT ) [NYSE: CI] remain unchanged following Cigna’s recent announcement that it has signed a definitive agreement to sell its life, accident and supplementary benefits business in seven countries to Chubb Limited. In addition, the financial strength ratings and long-term ICRs of Cigna’s operating subsidiaries also remain unchanged, with the exception of the credit ratings of Cigna Life Insurance New Zealand Limited, which have been reviewed with positive implications. (see the corresponding press release dated October 11, 2021).
On October 7, 2021, Cigna announced the sale of its life, accident and benefits insurance business, representing approximately $ 3 billion in premium income in its Asia-Pacific markets. The sale includes operations and / or legal entities in South Korea, Taiwan, Hong Kong, Thailand, Turkey, Indonesia and New Zealand in a deal valued at $ 5.75 billion. Cigna will maintain its international operations, focused on expatriates and private health / medical companies, in Europe and select Asia-Pacific markets, including several joint ventures in China, India and Australia. The international business sold represents $ 3 billion in premiums out of approximately $ 160 billion in revenue for the company, and the global business in total accounts for about 10% of Cigna’s total revenue.
Cigna is expected to use the proceeds of the transaction for general corporate purposes, including share buybacks, with exact amounts to be determined. AM Best notes that Cigna remains committed to maintaining leverage around 40% through the end of 2021, but it could increase slightly before the close. The transaction is expected to close in the second quarter of 2022 and is subject to regulatory approvals.
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