US health insurer Cigna Corp is considering a sale of its group benefits insurance business as part of a shift in focus towards healthcare cover, according to sources at Reuters.
Source: Matt Rourke / Associated Press
Reports from people familiar with the matter said a potential sale of the unit, which offers disability insurance, life, and accidental death and dismemberment coverage, could be valued at up to $6 billion.
If confirmed, the move would build on Cigna’s $54 billion acquisition of pharmacy benefits manager Express Scripts Holding Co last year.
Sources at Reuters also disclosed that Cigna is working with an investment bank to run an auction for the group benefits business, which could attract interest from other insurers looking to scale up their existing operations.
“Given the dynamic marketplace, we continually review opportunities to ensure we continue to deliver value to our customers and clients,” a Cigna spokesman was quoted as saying.
The group benefits business operates within Cigna’s group disability and other operations division, and reported $1.31 billion of adjusted revenue in Q2 2019.
Reuters noted that any proceeds from the sale could help Cigna to pay down its long-term debt, which totalled $37 billion at the end of June.
