AM Best Comments on Credit Ratings of Cigna Corporation Following Asia-Pacific Business Sale Announcement
October 11 2021 - 12:15PM
Business Wire
AM Best has commented that the Long-Term Issuer Credit
Rating (Long-Term ICR) of “bbb” (Good) and the Long- and Short-Term
Issue Ratings of Cigna Corporation (Cigna) (Headquartered 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 supplemental benefits business in seven
countries to Chubb Limited. Additionally, the Financial Strength
Ratings and Long-Term ICRs of Cigna’s operating subsidiaries remain
unchanged as well, with the exception of the Credit Ratings of
Cigna Life Insurance New Zealand Limited, which have been placed
under review with positive implications (see related press release
dated Oct. 11, 2021).
On Oct. 7, 2021, Cigna announced the sale of its life, accident
and supplemental benefits business, representing approximately $3
billion of premium revenue 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
transaction valued at $5.75 billion. Cigna will be retaining its
international business, which is focused on ex-patriots and
individual private health/medical business, in Europe and select
Asian-Pacific markets - including several joint ventures in China,
India and Australia. The international business being sold
represents $3 billion in premium out of roughly $160 billion in
revenue at the enterprise, and the international business in total
represents approximately 10% of Cigna’s total earnings.
Cigna is expected to utilize the proceeds of the transaction for
general corporate purposes, including share repurchases, with exact
amounts to be determined. AM Best notes that Cigna remains
committed to maintaining financial leverage around 40% through
year-end 2021, but it could increase slightly prior to the close.
The transaction is expected to close in the second quarter of 2022
and is subject to regulatory approvals.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Preliminary Credit Assessments and AM Best press
releases, please view Guide to Proper Use of Best’s Ratings &
Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20211011005564/en/
Joseph Zazzera, MBA Director +1 908 439 2200,
ext. 5797 joseph.zazzera@ambest.com Sally A. Rosen
Senior Director +1 908 439 2200, ext. 5280
sally.rosen@ambest.com Christopher Sharkey Manager,
Public Relations +1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com Jim Peavy Director,
Communications +1 908 439 2200, ext. 5644
james.peavy@ambest.com
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