Aetna to Realign Businesses; Creates Global Health and Global Financial Services Units.

Business/Insurance Editors

HARTFORD, Conn.--(BUSINESS WIRE)--Jan. 10, 2000

Aetna (NYSE:AET) today announced that it is realigning the company's operations into two main business units: Global Health and Global Financial Services.

Under the new structure, Global Health will consist of Aetna U.S. Healthcare's health business and Aetna International's health businesses. Global Financial Services will consist of Aetna Financial Services, the life and pension business currently in Aetna International, and the Group Insurance business that is currently part of Aetna U.S. Healthcare, which includes life, disability and long-term care products, as well as Large Case Pensions.

"This realignment is a natural next step that reflects Aetna's current strategic positioning and rapid growth as a global health and wealth leader," said Richard L. Huber, Chairman and CEO of Aetna. "With a doubling of our international revenues over the past four years, the company is now of a size and scale where organizing our businesses on a global basis will allow us to capitalize further on global customer trends and increase our cross-sell opportunities. In addition, the new structure is designed to strengthen the linkage between the international businesses and their domestic counterparts, increasing the sharing of technology and product expertise. And it provides greater opportunities to achieve synergies across our entire organization.

"The realignment also adds greater visibility to the mix of our businesses, which are roughly half health and half financial services," Huber said.

In the new organization, Michael J. Cardillo, president of Aetna U.S. Healthcare, will oversee the Global Health business, and John W. Coyle of Aetna U.S. Healthcare, will run the international health operations, reporting to Mr. Cardillo.

Thomas J. McInerney, president of Aetna Financial Services, will oversee the Global Financial Services business. Reporting to Mr. McInerney will be John Y. Kim, who will lead the domestic financial services business, in addition to retaining his responsibilities as CEO of Aeltus Investment Management, Inc., Aetna's investment advisory company. Frolly Boyd will continue to run the Group Insurance business and will report to Mr. McInerney. Frederick C. Copeland, Jr. will oversee the international financial services business, reporting to Mr. McInerney.

A leading provider of health and financial services benefits, Aetna provides nearly 47 million people worldwide with quality products, services and information to help them manage best what matters most: their health and financial well-being.

CAUTIONARY STATEMENT - Certain information in this press release is forward looking, including the statement regarding opportunities to achieve synergies from the realignment of Aetna's businesses. That information is based on management's estimates, assumptions and projections regarding Aetna's future results and other future events, and is subject to significant uncertainties, many of which are beyond Aetna's control. Important risk factors could cause Aetna's actual future results and other future events to differ materially from those currently estimated by management. With regard to the synergy opportunities, those risk factors include, among others, Aetna's ability to successfully cross sell products of its different businesses among domestic and international customers, and Aetna's ability to successfully realign business administration, technology and other processes to achieve cost-efficiencies. For further discussion of important risk factors that may materially affect Aetna, please see the risk factors contained in Aetna's Securities and Exchange Commission filings, which are incorporated herein by reference. You also should read those filings, particularly Aetna's 1998 Report on Form 10-K and 1999 Reports on Form 10-Q, for a discussion of Aetna's results of operations and financial condition.