A.M. Best Upgrades CIGNA Life Following Acquisition by Prudential Financial.Business Editors/Insurance Writers OLDWICK, N.J.--(BUSINESS WIRE)--April 1, 2004 A.M. Best Co. has upgraded the financial strength rating to A+ (Superior) from A- (Excellent) of CIGNA CIGNA CG (Connecticut General Life Insurance Company) INA (Insurance Company of North America) Life Insurance Company (NYSE NYSE See: New York Stock Exchange : CI) (Bloomfield, CT) following its acquisition by Prudential Financial Inc. (Prudential) (NYSE: PRU PRU Prudential Financial PRU Pupil Referral Unit PRU Photographic Reconnaissance Unit PRU Potomac Rugby Union (Washington, DC) PRU Provincial Reconnaissance Unit PRU Projets de Rénovation Urbaine PRU Pruhonice ) (Newark, NJ) for $2.1 billion in cash. The rating outlook is stable. A.M. Best believes that the acquisition is consistent with Prudential's strategy to improve operating returns by effectively deploying capital to expand its core financial products platform. A.M. Best views the transaction favorably as it diversifies Prudential's distribution capabilities in the defined contribution market, expands its presence in the middle-market 401(k) arena and establishes a leading position in the management of stable value assets. The retirement businesses of Prudential and CIGNA are largely complementary within the defined contribution segment. Prudential has a strong presence in the 403(b) and 457 retirement markets, while CIGNA's defined contribution operations have historically focused on 401(k) plans, which are sold primarily through employee benefit consultants. The combined operation Noun 1. combined operation - a military operation carried out cooperatively by two or more allied nations or a military operation carried out by coordination of sea, land, and air forces will have over two million plan participants Plan participants Employees or other beneficiaries who are eligible to receive benefits from a company's employee benefit plan. and assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. of $120 billion. A.M. Best believes that the acquisition will be accretive to Prudential's earnings and will help the organization move closer to its long-term return target. Beyond the complementary nature of the acquisition, A.M. Best expects that Prudential will realize expense efficiencies within certain back office functions, lowering unit costs and improving operating returns across the retirement business. Prudential's core affiliated insurance operations are currently rated A+ (Superior), and are unaffected by this rating action, as are the debt ratings of the group. The ratings reflect the organization's diverse and substantial sources of revenues and earnings, the prominent market position maintained in its core business lines, its steadily improving operating results and its very strong risk-adjusted capital position. For current Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , independent data and analysis on more than 1,050 health companies and more than 130 HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, industry composites, please visit http://www3.ambest.com/health/. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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