CNA Announces Intent to Sell Portions of Its Health Benefits Business.CHICAGO--(BUSINESS WIRE)--Aug. 20, 1998--CNA (NYSE NYSE See: New York Stock Exchange :CNA (Certified NetWare Administrator) See Novell certification. ) today announced it is discontinuing product sales in a portion of its health benefits division and will no longer quote insured, comprehensive medical business or small-to-medium-employer medical Administrative Services Only (ASO ASO arteriosclerosis obliterans. ASO 1 Administrative services organization, see there 2 Allele-specific–oligonucleotide hybridization 3 Anti-streptolysin O, see there ) business. CNA is looking at alternatives for the ongoing management of this business including the sale of the book of business. "Market conditions and the competitive environment have significantly changed in the healthcare marketplace in the past few years," said Jae Wittlich, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of CNA Group Operations. "As a result, CNA is currently exploring opportunities to sell its Employer Health and Affinity Health businesses while refocusing our efforts toward the provider market and increasing our already strong position in areas such as large-employer medical ASO, group life, long term disability, long term care and group accident products," Wittlich added. "We will continue to be a major player in the group health business through three entities: our Federal Markets SBU SBU St. Bonaventure University (St. Bonaventure, New York) SBU Stony Brook University (State University of New York) SBU Southwest Baptist University (Bolivar, MO) , CNA Group Re, and CNA Health Partners, a wholly-owned subsidiary of CNA Financial Corporation. CNA is also committed to the emerging provider markets through its management services organization management services organization Physician practice management company Medical practice An organization contracted by a health care provider/supplier to furnish administrative, clerical, and claims processing functions of the provider/supplier's practice. (MSO (1) (Multiple System Operator) Typically refers to a cable TV organization that owns more than one cable system, but it may refer to an operator of only one system. ) for physicians, hospitals and integrated delivery systems integrated delivery system Integrated provider Medical practice A coordinated health care system formed by physician groups and hospitals which ↑ efficiency and ↓ redundancy in providing health care; IDSs coordinate delivery of a broad range of health ." CNA Health Benefits, one of CNA's 29 strategic business units (SBUs), is primarily a provider of fully integrated managed care products that are alternatives to HMOs. Health Benefits includes Preferred Provider Organizations (PPOs) and Point-of-Service (POS (1) See point of sale and packet over SONET. (2) "Parent over shoulder." See digispeak. POS - point of sale ) plans. "We have clearly stated our intention to achieve world-class performance levels in every line of business that we are in, and if we cannot meet our goals, we will not hesitate to move on," said CNA Chairman and Chief Executive Officer Dennis Chookaszian. "The comprehensive medical business is one in which, despite our best efforts, conditions do not warrant our continued participation in the market. We are confident that this strategy will enable us to more readily achieve our overall goals of world-class levels of customer service and shareholder value." Approximately 500 employees are expected to be impacted by this decision. They will be given the opportunity to apply for other positions within CNA and will be offered outplacement out·place·ment n. The process of facilitating a terminated employee's search for a new job by provision of professional services, such as counseling, paid for by the former employer. assistance and severance if they are unable to remain with the company. Chookaszian said the 500 employees were included in the 10 percent overal CNA workforce reduction announced on August 5 and the costs associated with this reorganization are included in the estimated charges that CNA plans to record in the third quarter of 1998. CNA is one of the world's premier insurance organizations, ranking among the top 10 U.S. insurance groups. Since 1897, CNA has built on a foundation of financial strength, stability and commitment to customers and business partners. CNA is a registered service mark and trade name of CNA Financial Corporation. FORWARD LOOKING STATEMENT The statements contained in this press release which are not historical facts are forward-looking statements that involve risks and uncertainties, including, but not limited to, product and policy demand and market responses, the effect of economic conditions, the impact of competitive products, policies and pricing, product and policy development, regulatory changes and conditions rating agency policies and practices, development of claims and the effect on loss reserves, the performance of reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. companies under reinsurance contracts with the Company, investment portfolio developments and reaction to market conditions, the results of financing efforts, the actual closing of contemplated transactions and agreements and other risks detailed in the Company's Securities and Exchange Commission filings. No assurance can be given that the actual results of operations and financial condition will conform to the forward-looking statements contained herein.
CONTACT: CNA, Chicago
Media:
Roger Morris, 312/822-4195
Clark Walter, 312/822-1454
Analysts:
Deborah Kamp, 312/822-7752
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion